On June 27th local time, the Brazilian government launched the 2023-2024 Brazilian Agricultural Crop Plan in Brasilia, which will provide low interest rural credit of R $364.2 billion to large and medium-sized producers.
According to the Brazilian newspaper Globe, this plan is held annually and aims to support Brazilian agricultural production by providing loans at lower interest rates. In the 2022-2023 annual plan, the Brazilian Ministry of Agriculture and Livestock issued 287 billion reais. The scale of this plan has increased by approximately 27% from 2023 to 2024.
According to the report, although this will be the largest agricultural crop program in Brazilian history, the amount of 364 billion reais is lower than the previous estimate of 400 billion reais by Brazilian Minister of Agriculture and Livestock Carlos Favaro.
This plan will provide lower interest agricultural loans for some ecological agriculture and organic production to encourage the sustainable development of low-carbon agriculture in Brazil.
President of Brazil's President Lula said in the social media live broadcast that the current benchmark interest rate of 13.75% in Brazil is an obstacle to rural credit, and he hopes that the benchmark interest rate can be reduced.
CNN reported that many interviewed experts said that agribusiness represents a strong driving force for Economy of Brazil's economic activities. The benchmark interest rate is crucial to the survival of agribusiness, which affects all financing processes from production to final export.
The report indicates that this credit scale meets the Brazilian agricultural requirements for the government to provide subsidies to producers on an equal basis. Through low interest loans and subsidies, the government has compensated for the difference between the interest rates implemented in the financial market and the actual interest rates paid by producers.