The Ministry of Finance said on Friday that Minister Fernando Haddad will send a letter to the Federal Court of Audit (TCU) in search of technical and legal backing for immediate resumption of credit lines with equalized resources of the 2024/25, which were suspended by the National Treasury.
The portfolio stated in a statement that the Congress has not yet approved Annual Budget Law (LOA) 2025, and stressed that Pronaf, which serves small farmers, continues to operate.
The subsidized agricultural financing in the Safra 2024/25 plan were suspended from this Friday, according to a letter from the National Treasury sent to financial institutions.
In the document, the National Treasury also indicated that the costs of subsidized programs have grown, while experts point out the rise of the Selic rate since the launch of the crop plan as a factor that impacts the expenses for subsidized financing.
The suspension of such financing happens at a time when producers in Brazil are planting the second crop of corn, reap the soy and start the rice harvest. In other cultures, such as coffee, producers perform cultural treatment.
The newspaper Economic value anticipated the information about the suspension.
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“The decision of the National Treasury was already expected by the market, considering the variation of Selic interest that rose from 10.5% AA when the crop plan was announced, to 13.25% these days,” said the director of new structures FINTECH TERRAMAGNA, David Telio, in a statement.
According to him, the budget for the subsidy of interest on controlled rural credit was impacted by Selic’s discharge.
“Not to mention the challenges of federal government fiscal management since 2023,” added the director of Terramagna, who sees private financing through Agro fintechs, capital markets, strokes and banks replacing some subsidized lines of credit.
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According to the Treasury document seen by Reuters, the suspension comes after the release of a new parameter grid by the Secretary of Economic Policy and the receipt of updated information from the expense of spending on the stock of rural operations contracted with equalization of interest rates.
According to the Secretary of the National Treasury, Rogério de Oliveira, who signs the document, the estimates of spending to 2025 with the economic grant were updated, showing a “relevant increase” of expenses.
This happened “due to the strong elevation in the economic indices that make up the costs of sources in relation to those used in the making of the budget bill – Ploa 2025, still in the National Congress”.
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“Given this framework and considering that the proposal of budgetary law for the year has not yet been approved, I determine the suspension, as of 21/02/2025, of new hiring of funding subsidized by the National Treasury as part of the 2024/2025 Plan Plan “Except for pronaf funding lines,” said the secretary in the circular.
The president of the Federation of Agriculture and Livestock of the State of São Paulo (Faesp), Tirso Meirelles, regretted what called the federal government’s lack of commitment to the agricultural sector. For Meirelles, the suspension of new agricultural financing hires from Friday shows that there is uncontrolled in monetary policy, which will mainly affect small and medium producers.
The Minister of Agriculture and Livestock, Carlos Fávaro, said that the government cannot be irresponsible and continue to equalize without the approved Union budget.
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“We have two situations: it has risen to Selic and has no approved budget. It has to be prudent, responsible and Congress needs to have sensitivity and vote on the budget quickly, because if they do not vote, they begin to have consequences. The crop plan for, ”he said.
Sought, the National Treasury did not comment on the matter immediately.
