Rural Credit: producers will be able to renegotiate debts

The National Monetary Council (CMN) announced on the 28th that producers in 16 states affected by climate events or the drop in agricultural prices are allowed to renegotiate their rural credit debts for investments. Renegotiation requests must be made by May 31st.

According to the Ministry of Finance, this measure was necessary due to the negative impact of climate behavior on the 2023/2024 harvest, especially in the main producing regions, mainly affecting soybean and corn crops and reducing productivity in some specific areas of the South , Midwest and São Paulo.

The Ministry of Agriculture also reported that rural producers have faced challenges arising from the drop in the prices of soybeans, corn, meat and milk in some regions, in addition to high input costs.

Rural credit

Financial institutions are authorized to renegotiate, at their discretion, up to 100% of the principal value of installments due between January 2nd and December 30th of this year. These lines of credit must have been contracted by December 30 of the previous year, and borrowers must be up to date with their installments by that date.

The renegotiation encompasses portions of rural investment credit lines contracted with controlled resources, including equalized resources, mandatory resources and resources from the Constitutional Funds of the Northeast, North and Central-West. Financing must be linked to the National Program for Strengthening Family Farming (Pronaf), the National Support Program for Medium Rural Producers (Pronamp) and other rural investment programs of the National Bank for Economic and Social Development (BNDES), as well as to the lines of rural investment from constitutional funds.

The productive activities and benefiting states are as follows:

• Soy, corn and beef cattle: Goiás and Mato Grosso;
• Meat and dairy farming: Minas Gerais;
• Soy, corn and dairy cattle: São Paulo, Paraná, Rio Grande do Sul and Santa Catarina;
• Meat cattle farming: Rondônia, Roraima, Pará, Acre, Amapá, Amazonas and Tocantins;
• Soy, corn and dairy and meat cattle farming: Mato Grosso do Sul;
• Dairy cattle farming: Espírito Santo and Rio de Janeiro.

The installments

The renegotiated installments must be corrected by the contractual financial charges, including additional charges in case of default. However, installments due between March 28 and April 15, 2024 can be adjusted according to the contractual charges on a regular basis, waiving extra charges for default. Borrowers must pay at least the financial charges expected for this year on the respective installment due dates.

For credit lines with the last installment due in 2024, 2025 or 2026, up to 100% of the principal amount of the 2024 installments can be rescheduled for repayment within one year after the due date of the last installment scheduled in the current repayment schedule. .

Operations

In operations with the last installment expected after 2026, up to 100% of the principal of the 2024 installments must be added to the outstanding balance and redistributed in the installments due from 2025 onwards.

Estimates indicate that investment operations with installments due in 2024 could reach R$20.8 billion in equalized resources, R$6.3 billion in resources from constitutional funds and R$1.1 billion in mandatory resources. If all installments of operations eligible for renegotiation are extended, the total cost will be R$3.2 billion, divided between 2024 and 2030, with half of this amount allocated to family farming and half to corporate farming. The effective cost will be deducted from the amounts allocated to equalizing rates under the 2024/2025 Harvest Plan.

As for debts from Pronaf credit operations with resources from constitutional funds, borrowers affected by climate change have up to 120 days after the installment is due to request renegotiation. For installments overdue for more than 120 days, charges will be applied for the situation of default, but with rates linked to constitutional funds, which have lower interest rates than other rural credit lines.

(With Agência Brasil).