Brazil Announces “Plano Safra 2022/23” (Harvest Plan 2022/23)

Brazil released their annual “Plano Safra 2022/23” (Harvest Plan 2022/23) on Tuesday, June 29, 2022 with R$ 340.8 billion in available funds, which represents an increase of 36% compared to the prior year. Production and marketing programs will have available R$ 246.28 billion, which is an increase of 39% compared to last year. Investment programs will have available R$ 94.6 billion, which is an increase of 29% compared to last year.

The Harvest Plan in Brazil is their equivalent of the 5-Year Farm Bill in the U.S., but Brazil does it annually. The majority of Brazil’s Harvest Plan consists of loans for production, marketing, and investments with subsidized interest rates depending on the borrower’s size of operation.

The amount of money available for lower interest subsidized loans increased 18% to R$ 195.7 billion. The amount of money available for loans with market intertest rates increased 69% to R$ 145.18 billion. The prime interest rate in Brazil (Selic) is currently 13.25%.

Small and medium size producers are given a priority in the Harvest Plan 2022/23 with most of the lower interest subsidized loans going to these two groups. For larger producers, the government allocates resources to various financial institutions for production loans at generally market interest rates.

For the National Program for Strengthening Family Farming (Pronaf), there is R$ 53.6 billion available (+36% compared to last year) at interest rates of 5-6% with a maximum term of 10 years with a 3-year grace period for the first payment.

For the National Program Helping Medium Size Rural Producers (Pronamp), there is R$ 43,7 billion available (+28% compared to last year) at an interest rate of 8% with a maximum term of 8 years with a 3-year grace period for the first payment.

For most of the remaining producers and cooperatives there is R$ 243.4 billion available at an interest rate of 12%. The terms and conditions of these loans will be negotiated between the individual burrower and the financial institution.

Sustainability – The Harvest Plan will have R$ 6.1 billion available for agricultural sustainability by providing low interest loans for the renovation of degraded pastures, the implementation of crop-livestock-forestry programs, adopting conservation practices, protecting natural resources, reestablishing conservation areas, protecting existing conservation areas, and renewable energy. The interest rates on these loans is 7%.

Irrigation – A total of R$ 1.95 billion (+ 44% compared to last year) will be available of irrigation and irrigation infrastructure. These loans will have a 10-year term with 7% interest.

Innovation – The Harvest Plan has R$ 3.5 billion available for investments in innovation and technology for the development of software and adoption of best practices, with an interest rate of 10.5%.

Grain Storage – The Program for the Construction and Expansion of Storage (PCA) has R$ 5.1 billion available at 7% interest for storage units up to 6,000 tons and 8.5% intertest for storage units over 6,000 tons. The length of the loan is up to 12 years with a 3-year grace period. There is a limit of R$ 50 million on investments for grain storage loans.

Tags: irrigation, loans, Plano Safra 2022/23, Harvest Plan 2022/23, marketing, инвестиции, Brazil, Production, grain storage