Amount available for rural credit line in dollar may be insufficient

Last week, the National Bank for Economic and Social Development (BNDES) announced an increase in the resources available for the fixed rate rural financing line in dollars developed in partnership with the Ministry of Agriculture and Livestock. With an additional R$ 2 billion, the BNDES Rural Credit line in the modality with a reference cost in dollars reaches R$ 4 billion. The value, however, may not meet the demand.

The director of the Brazilian Association of Agribusiness (Abag) and president of the Brazilian Institute of Agricultural Law, lawyer Renato Buranello, believes that even with the increase in resources, the value may still not be enough for the needs of the market. “I understand that there will be a lot of demand, so the amounts must be insufficient. But it is a good start, and I think we will still have a greater possibility of increasing it, given the demand that should prove to be greater than the beginning of the program”, he explained.

The financing line was launched in April. To receive the credit, the farmer must have income in dollars or linked to the American currency to mitigate exchange rate risks. This verification will be carried out by the financial agent. The final cost starts at approximately 7.59% per year, plus exchange variation. Total terms range from 25 to 120 months, with a grace period of up to 24 months.

The director of the Associação Brasileira do Agronegócio Renato Buranello spoke about the importance of this line of credit being pegged to the dollar due to the Brazilian agricultural potential for foreign trade: “You have an expected revenue in dollars, with a reference in dollars, and you will have a debt referenced in the same currency, for us this is really efficient, reduces risk and gives more security to the borrowing producer”, explained the expert.

According to the Ministry of Agriculture and Livestock, the objective of the line is the acquisition of agricultural machinery and equipment, in order to increase productivity in the field and expand the technological update of the fleet of tractors and harvesters. The credit line protocol will open on Tuesday (16).