Brazil Senate Panel Delays Rural Debt Vote After Finance Ministry Offers Alternative Plan

Overview

• The Finance Ministry, which delivered its draft Thursday, outlined two credit lines that give up to six years to repay and set different terms for borrowers who are current versus those in default.
• The first line uses controlled resources with annual rates of 6% for family farming under Pronaf, 8% for medium producers under Pronamp, and 12% for other producers, with a 10% down payment for current loans and 20% for delinquent ones.
• The second line relies on free, market-rate funds for large producers and the proposal skips tapping the Social Fund linked to pre-salt oil revenue.
• Senator Renan Calheiros said the Senate’s Economic Affairs Committee will postpone Tuesday’s vote and meet that afternoon with the government to settle terms and choose between a bill or a provisional measure.
• The ministry estimates coverage of about 100,000 credit operations totaling R$81.7 billion, and early reactions from lawmakers and farm leaders fault the proposed rates as high for big producers.