Amid criticism from the agricultural sector, the government launches the Safra Plan with more expensive credit
Amid tension with the production sector — driven mainly by the decree that increased the IOF (Tax on Financial Operations) and other announced collection measures that directly impact the sector — the government launches, this Tuesday (1st), the 2025/2026 Business Harvest Plan , with expectations of record value and more expensive credit.
Although, within the government, there is an expectation that the contribution will exceed, in nominal values, the R$584 billion in resources announced in last year's Safra Plan, the Executive faces a series of challenges in constructing the new edition.
These obstacles, which were already significant with the basic interest rate at 15% per year , intensified after the publication of a Provisional Measure that ends the Income Tax exemption on LCAs (Agribusiness Credit Letters).
The MP was published as an alternative to compensate for the setback in the decree that had increased the IOF. Investment securities previously exempt from IR, such as LCAs, will now be taxed at a rate of 5% .
Traditionally, LCAs represent one of the main sources of funds for financing rural credit. In the 2024/25 harvest, however, the share of letters fell to 29%, compared to 43% in the previous harvest.
“The proposal announced by Minister Fernando Haddad may further aggravate the current situation. In addition to the reduced attractiveness of these bonds due to the minimum grace period required in the CMN provision, the expected taxation tends to discourage investors, generating an additional reduction in the volume of resources invested in LCAs”, says the CNA.
“This retraction directly impacts the availability of funding for rural credit”, concludes the entity.
Another problem for the government at this time is the reduced space in the budget. One of the requests from the sector, for example, is the allocation of R$4 billion to the PSR (Rural Insurance Premium Subsidy Program) in this year's Harvest Plan.
Rural Insurance is the main public policy for protecting agricultural production against losses caused by climate events. It is a way of reducing producers' exposure to natural risks that lead to crop failure, such as severe floods and droughts.
The Minister of Agriculture and Livestock, Carlos Fávaro, himself admits that it will be difficult to find fiscal space to meet demand.
The program currently has around R$1 billion in its budget. In June, due to lack of fiscal space, the Ministry of Agriculture blocked R$354.6 million and set aside another R$90.5 million earmarked for rural insurance, which was frowned upon by the sector .
Another demand from the sector is the creation of a rural financing line in dollars. The CNA understands that the scenario predicted for the next harvest will be more challenging than in previous years, due to the high interest rate, which makes credit more expensive, and the context of geopolitical uncertainty.
The proposal for financing in dollars has been well received within the federal government. Ministers have already publicly acknowledged this possibility.
The idea is that indexing to the dollar serves as an alternative to high interest rates, especially for producers with revenues in foreign currency, such as those of soybeans, corn, coffee and cotton.
The sector advocates that this new line be aimed at producers with contracts linked to the dollar, using protection instruments such as futures contracts, and that there be regulation of the spread charged by banks.
CNN Brasil
