May 01, 2019

New 2019/20 Harvest Plan in Brazil will be released June 12th

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil's Minister of Agriculture, Tereza Cristina, announced last Saturday that Brazil's Harvest Plan 2019/20 will be released on June 12th. She indicated that they are in the final stages of determining the interest rates for the various production loans.

She stated that there will not be a reduction in funding compared to the 2018/19 Harvest Plan, but there will be a reallocation of funds based on demand. No programs will be cut, but there will be increased funding for programs in high demand and decreased funding for programs in low demand.

Funding for the various credit programs in the 2018/19 Harvest Plan has run out, but the government will make available R$ 6 billion for what is called the pre-cost expenses. This is for farmers to purchase inputs for the 2019/20 growing season before the new Harvest Plan becomes effective on July 1, 2019.

This type of pre-growing season financing program is common in Brazil because of the logistical challenges in Brazil, farmers like to get their inputs on hand before July. Some early season corn in southern Brazil might get planted as early as mid-August, so farmers can't wait until July to start purchasing their inputs.

Farm programs in Brazil are renewed on a yearly basis with the main focus being on subsidized low interest production loans primarily for input purchases. The government also provides subsidized loans for machinery purchases, construction of storage units, etc.