Jun 28, 2023

Brazil Announces Plano Safra 2023/24 (Harvest Plan 2023/24)

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

The Brazilian President, Luiz Inacio Lula da Silva, along with the Minister of Agriculture, Carlos Favaro, released the Brazilian Plano Safra 2023/24 (Brazilian Harvest Plan 2023/24) on Tuesday. The annual plan will take effect July 1, 2023 and end on June 30, 2024 and will have available R$ 364.22 billion in financing (approximately $76 billion), which represents an increase of 27% compared to the previous year.

Brazil's Plano Safra is the equivalent of the U.S. Farm Program, but on an annual basis. The main thrust of the program is low-interest loans for agricultural production, machinery purchases, and capital investments. Financing will be available to produce row crops, rice, fruit, flowers, coffee, forest plantations, and livestock production.

Interest rates for production loans will vary from 8% to 12% depending on the size of the producer and the program. Interest rates on capital investments will vary from 7% to 12.5% depending on the program. Interest rates on machinery purchases by medium size producers will be 10.5% and 12.5% for larger producers. The amount of financing available for individual producers has increased this year.

The Plano Safra 2023/24 is oriented more toward the medium and large size producers. There will be a separate program for small family farmers with more than R$ 75 billion in available financing (approximately $15.6 billion).

One of the main emphases of the plan is sustainable agriculture. Interest rates will be lower on loans geared toward sustainable agriculture such as organic farming, bio inputs, natural fertilizers, renewable energy, and animal health and welfare.

The Program to Finance Sustainable Agricultural and Livestock Production Systems or RenovAgro, will emphasize the renovation of degraded pastures, implementing crop-livestock-forest integrated systems, adoption of conservation practices, protection of natural resources, and reduced carbon emissions.

A lack of adequate grain storage is an ongoing concern for farmers in Brazil especially when there is record production such as in the 2022/23 growing season. To address this issue, the Grain Storage Construction Program (PCA) will have an increase of 81% for financing the construction of storage units up to 6,000 tons and an increase of 61% for the construction of larger storage units.

The plan also includes a 30% increase in the Agricultural Irrigation Finance Program which finances irrigation systems including electrical infrastructure and the construction of irrigation reservoirs.