Jun 29, 2023

Brazil Releases Plano Safra 2023/24 for Family Farmers

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

Brazilian President Luiz Inacio Lula da Silva released the second part of the Plano Safra 2023/24 on Wednesday. This part is dedicated to family farmers and it provides R$ 77.7 billion in funding when all the various programs are combined. This represents a record level of spending and a 34% increase compared to last year. This announcement came a day after the government released the Plano Safra 2022/23 for medium and large-scale producers with funding of R$ 364.22 billion. The combined funding for 2023/24 is about 440 billion reals (approximately $91.8 billion). Both plans will start on July 1, 2023 and run through June 30, 2024.

The family farmers' plan will have a 4% interest rate on loans for food production such as rice, edible beans, manioc, vegetables, eggs, milk, etc. Interest rates will be 3% on loans for sustainable agricultural production such as organic foods. Capital investment loans will have a 4% interest rate.

Approximately 80% of the funding for these two plans will go toward production and marketing loans with 20% for capital investments. The interest rates on loans for medium-sized producers will be approximately 8% with 12% for others. Interest rates for capital investments will vary from 7% to 12.5%.

The interest rates on loans from both plans are subsidized by the government and are below market rates. The Selic rate in Brazil (prime rate) is currently 13.75% with expectations it will decline to 12.25% by the end of 2023 and 9.5% by the end of 2024.

The government has put special emphasis in both plans on sustainable low carbon agricultural production.