The Brazilian agribusiness is in a state of expansion, focused on competitiveness and modernization, making permanent use of technology as a path to sustainability. This article shows how the Brazilian government assistance is essential in this process.
Brazil has an enviable international position in agribusiness, being one of the largest suppliers of food stuffs and commodities the world over. The country has a huge area available for the production of grains, livestock and other agro products.
Regular rainfall and generally ideal growing conditions in the major Brazilians regions are other important aspects. However, the natural and geographic are not the only factors responsible for the enormous scale of the agricultural sector in Brazil; the government must also take some credit.
Governmental Financing in Brazil
|Program||Interest Rate per Year||Financing Limit||Term Length||Expiration|
|ABC||5.0%||1 million per year/crop||From 5 to 15 years, depending on the project.||06/3/2014|
|INOVAGRO||3.5%|| For individual enterprise: Maximum of 1 million BRL |
For collective enterprise: 3 million BRL, respecting the individual limit per participant.
|Maximum of 12 years.||06/3/2014|
|MODERAGRO||5.5%|| For individual enterprise: Maximum of 800 thousand BRL |
For collective enterprise: 2.4 million BRL, respecting the individual limit per participant.
For replacement bovine or buffalo matrix: until 200 thousand BRL per client, and to 4.5 thousand BRL per animal.
|Maximum of 10 years.||06/3/2014|
|MODERFROTA||5.5%|| For the acquisition of equipment designated for the preparation, drying and processing of coffee: Maximum of 40 thousand BRL |
For the acquisition of others: there's no limit.
|Maximum of 4 years.||06/3/2014|
|MODERINFRA|| For the acquisition of items inherent to irrigation: 3.5% |
For the acquisition of others items: 5.5%.
| For individual enterprise: Maximum of 1.3 million BRL |
For collective enterprise: 4 million BRL, respecting the individual limit per participant.
|Maximum of 12 years.||06/3/2014|
|PCA||3.5%||No limit established, the BNDES will analyze the project and define if it would be financed or not.||Maximum of 15 years.||06/3/2014|
|PROCAP-AGRO|| For working capital financing operations: 6.5% |
For others operations: 5.5%.
|Different to each type of investment.||Different to each type of investment.||06/3/2014|
|PROCAPCRED|| Financial Cost: Long Term Interet Rate (LTIR)BNDESremuneration: 1% |
Financial Institution Accredited: up to 3%.
|No limit established, the BNDES will analyze the project and define if it would be financed or not.||Maximum of 6 years.||03/31/2014|
|PRODECOOP||5.5%||Maximum of 100 million BRL per cooperative. The limit can be extended to 150 million BRL or to 200 million BRL in specific situations.||Maximum of 12 years, the term can be extended if is necessary.||06/3/2014|
|PRONAF||Different to each type of PRONAF.||Different to each type of PRONAF.||Different to each type of PRONAF.||06/3/2014|
|PRONAMP||4.5%|| For individual enterprise: Maximum of 350 thousand BRL per year/crop |
For collective enterprise: 20 million BRL, respecting the individual limit per participant.
|Maximum of 8 years, being the payment frequency monthly, quarterly, biannual or annual according to the income flow of the rural producer.||06/3/2014|
The government agriculture policy in Brazil is very comprehensive. The government has had a lot of incentive and financing programs in order to encourage growth.
ABC is the Programa para Redução da Emissão de Gases de Efeito Estufa na Agricultura or the Program for Reducing Emission of Greenhouse Gases in Agriculture. The program’s main objectives are:
- promote the reduction of emissions of greenhouse gases originating from agricultural activities
- reduce deforestation
- increase agricultural production on a sustainable basis
- adequate farms with environmental legislation
- extend the area of cultivated forests
- stimulate the recovery of degraded areas.
INOVAGRO is the Programa de Incentivo à Inovação Tecnológica na Produção Agropecuária or the Program to Encourage Technological Innovation in Agricultural Production. The program aims to support necessary investments to integrate technological innovation into farms, in order to:
- increase productivity
- adoption of good agricultural practices and rural property management
- competitive participation of farmers in different consumer markets.
MODERAGRO is the Programa de Modernização da Agricultura e Conservação de Recursos Naturais or the Program for Modernization of Agriculture and Conservation of Natural Resources. The program’s goal is to:
- Support and promote the sectors of production, processing, manufacturing, packaging and storage of raising livestock.
- Encourage actions related to animal advocacy.
- Support the recovery of soils by financing for the acquisition, transportation, application and incorporation of agricultural lime.
MODERFROTA is the Programa de Modernização da Frota de Tratores Agrícolas e Implementos Associados e Colheitadeiras or the Program of Modernization of Agricultural Tractors and Associated Implements and Harvesters. The objective of this program is to finance the acquisition, isolated or associated with investment, of tractors, harvesters, cutting decks, sprayers, planters and seeders.
MODERINFRA is the Programa de Incentivo à Irrigação e à Armazenagem or the Incentive Program to Irrigation and to Storage. The main objectives of this program are:
- Support the development of irrigated agriculture sustainability, economically and environmentally, to minimize the risk in the production and increase the supply of agricultural products.
- Expand the storage capacity of agricultural production by farmers.
- Support the construction and expansion of facilities for the maintenance of farm machinery and equipment, and for the storage of agricultural inputs.
PCA is the Programa para Construção e Ampliação de Armazéns or the Program to the Construction and Expansion of Storages. The program aims to support the necessary investments to the expansion of the storage capacity through the construction and enlarging of storage.
PROCAP-AGRO is the Programa de Capitalização de Cooperativas Agropecuárias or the Capitalization program to the Agriculture and Livestock Cooperatives. The program aims to:
- Promote capital recovery and restructuring of cooperatives of agricultural, agribusiness, aquaculture or fishing production.
- Enable the financial recovery through payment of quotas-shares of cooperatives.
- Finance working capital to meet the operating immediate needs of the cooperatives.
PROCAPCRED is the Programa de Capitalização de Cooperativas de Crédito or the Capitalization Program of Cooperatives of Credit. The objective of the program is to promote the strengthening of the capital structure of credit unions, through the provision of direct funding to their members. Credit cooperatives operating for more than 1 year are eligible for the program of acquisition of quota-shares.
PRODECOOP is the Programa de Desenvolvimento Cooperativo para Agregação de Valor à Produção Agropecuária or Cooperative Development Program to Add Value to the Agriculture and Livestock Production. The main objective of the program is to improve the competitiveness in agribusiness complex of Brazilian cooperatives. This should be done through modernization of productive systems and commercialization.
PRONAF Investment is the Programa Nacional de Fortalecimento da Agricultura Familiar or the National Program to the Family Agriculture Strengthening. The program works as a financial support to agricultural and livestock activities.
The Créditos Rurais or Rural Credits will be conceded by PRONAF to individual or collective usage, to collective usage the credits will be granted by the following ways of financing:
- PRONAF Agroindústria or Agribusiness
- PRONAF Mulher or Woman
- PRONAF Agroecologia or Agroecology
- PRONAF ECO
- PRONAF Mais Alimentos or More Food
- PRONAF Composição de Dívidas or Composition of Debits
- PRONAF Jovem or Youth
- PRONAF Composição de Dívidas de Estiagem or Composition of Drought Debits.
PRONAMP is the Programa Nacional de Apoio ao Médio Produtor Rural or National Program of Support to the Medium Rural Producer. The program aims to promote the development of medium rural producers’ activities, providing the income increase and the jobs generation in the countryside.
The program will finance individual or collective investments related to goods and services necessary for the enterprise through the liberation of Rural Credits. The financing will only be conceded if the goods and services were directly related to the production and service activities. Additionally, financing will be provided if the funds are designated to promote the production increase and the rural producer’s family income.