With no prior communication to the sector, the Ministry of Agriculture has froze almost half of the budget available for the Rural Insurance Award (PSR) subsidiary, one of the main pillars of national agricultural policy and sensitive point in relation to agribusiness.
Data obtained by CNN Indicate that, on Wednesday (18), the ministry made a block of $ 354.6 million and a contingency of another $ 90.5 million in rural insurance.
The total value of the freezing – of R $ 445 million – corresponds to 42% of the allocation of R $ 1.060 billion approved in the PSR budget to 2025.
The numbers were entered in the Integrated Budget and Planning System (SIOP) and freezing information was confirmed by ministry sources. Officially, the folder did not speak.
Three members of the Parliamentary Front of Agriculture (FPA) heard by CNN showed surprise and dismay with the cut. They reported that there was no government notice of the government about it.
By budget logic, blockages are much more problematic for the execution of ministries than contingencies.
Blocks refer to expenses that need to be cut because they exceed the spending ceiling and have remote chances of reversal.
Contents can be reversed more easily because they seek to ensure the reaching the fiscal target. Therefore, in case of extra revenues, the values are discontinished.
Rural insurance is a way to decrease producers’ exposure to natural risks that lead to crop breaking, such as floods and stronger droughts.
Hiring insurance, the producer passes his risks to an insurer. As the cost is usually prohibitive, due to specific characteristics of agriculture, the government offers a subsidy through PSR. It is, in practice, a financial aid for the hiring of the policy.
Freezing should generate even more tension between the government and the sector, which was already complaining of initiatives such as the taxation of agricultural credit (LCAS), one of the main “foundings” of the field, which will no longer have income tax exemption and have a 5%rate.
The Confederation of Agriculture and Livestock of Brazil (CNA) requested, in April, an expansion of the Rural Insurance Budget to R $ 4 billion in the next crop plan.
Wednesday’s cut goes in the opposite direction and increases expectations about the announcement of the 2025/2026 Safra Plan, which should take place between the end of June and early July.
