Fiscal space in the Budget challenges ministries' request for the Safra Plan

The amount of the 2026/27 Harvest Plan, although it maintains the upward adjustment, should not reach the values defended by the ministries linked to agribusiness, according to sources involved in the negotiations heard by CNN. The main impasse is finding space in the budget to finance the volume of resources and subsidies needed for rural credit for the next season.

The discussion gained strength this Wednesday (17), when the government held two meetings at the Civil House to begin the final phase of preparing the program. In the morning, technicians from the ministries and bodies involved presented scenarios and projections for the next harvest. In the early evening, negotiations advanced to ministerial level.

Ministers Miriam Belchior (Civil House), Dario Durigan (Finance), Fernanda Machiaveli (Agrarian Development and Family Farming), and André de Paula (Agriculture and Livestock) participated in the second meeting.

According to reports made to CNN, members of the economic team highlighted difficulties in accommodating the values requested by the sectoral areas in the budget.

Especially due to greater budget restrictions. A source recalled the recent freeze in public accounts - which even reached more than half of this year's rural insurance budget - of more than R$23 billion to comply with fiscal rules.

In this way, the government needs to balance the volume of resources made available to the sector with the cost of interest equalization, a mechanism used to reduce the fees charged to rural producers.

The request presented by the ministries totals R$652 billion, with R$570 billion allocated to medium and large producers and R$82 billion to family farming. Mapa also asked that the interest charged on the funding lines reach single digits.

Despite the tight budget, there is no problem outside the normal route of preparing the Safra Plan. The assessment of participants in the negotiations is that the process follows a common rite.

Every year, ministries present proposals considered appropriate to the needs of each segment and, throughout discussions with the economic team, the numbers undergo adjustments until a format considered viable from a fiscal point of view is reached.

Debts and rural insurance are not central

The discussion takes place in parallel with other topics considered priorities for agriculture, such as rural insurance and the renegotiation of producers' debts.

Both proposals are being processed in Congress. The project that creates a program to refinance debts is the most urgent and the one that finds the least consensus among producers, parliamentarians and the economic team - especially with regard to interest subsidy calculations over the years.

The changes to rural insurance are less dramatic, but they also divide congressmen and the government. In the project approved by the Chamber of Deputies last month, an obligation is created in the budget for the execution of insurance, which would shield the resources directed to contingency activity.

Government members recognize that the three fronts are directly connected, as they depend on public resources and impact financing conditions in the field.

Despite this, as the measures still depend on approval by the National Congress, they are not being considered in the Safra Plan calculations at this time.

According to an interlocutor interviewed by the report, the proposals still need to go through the natural legislative process and this cannot delay discussions or place fictitious numbers to save space in the program if the texts become laws, even because the LRF (Fiscal Responsibility Law) does not allow this to be done.

The assessment within the government is that any changes related to these themes can only be incorporated after the conclusion of the legislative process - which should be left for the PLOA (Annual Budget Bill) of 2027, which will only be sent to Congress in August.

Until then, work is focused on building a Harvest Plan based on existing instruments and resources actually available in the budget.

Source: CNN