MercoPress. South Atlantic News Agency

Lula government promoting Brazilian agriculture with US$ 76 billion financial support

The Agriculture Ministry said that the 2023/24 “Safra Plan” would provide 364.2 billion reais (US$ 76 billion) (27%) increase in financial farming support

Brazilian president Lula da Silva has increased subsidized farm loans as part of a national agriculture funding plan as he aims to strengthen ties with the sector, which has been driving the economic activity of the country.

 The Agriculture Ministry said in a statement on Tuesday (Jun 27) that the 2023/24 “Safra Plan” would provide 364.2 billion reais (US$ 76 billion) in financing to support Brazilian medium- and large-sized producers, a 27% increase from the previous cycle.

According to the ministry, the plan for agribusiness would allocate 186.4 billion reais through controlled interest rates, a 31.2% increase, with 101.5 billion reais (+26.1%) being subsidized by the Treasury.

The national farm funding plan is considered a key element in boosting production and fostering closer relations with the sector, which played a pivotal role in the higher-than-expected GDP growth in the first quarter, improving prospects for the Brazilian economy in the early stages of Lula’s administration.

The agricultural sector overwhelmingly supported then-President Jair Bolsonaro in last year’s tightly contested presidential election.

The Agriculture Ministry also announced that the funding plan would see an 81% increase in resources for the construction of storage facilities with capacities of up to 6,000 metric tons, as well as a 61% increase for larger-capacity warehouses.

The adjustment comes in response to a storage deficit exacerbated by a record grain harvest in the last season.

Moreover, the plan would encourage the strengthening of environmentally sustainable production systems by reducing the interest rate for producers who adopted more sustainable agricultural practices by 0.5 percentage point in the funding cost, said the ministry.