Safra Plan should have a cut of up to 1.5 points in interest on controlled lines

Despite fiscal restrictions and the high cost of subsidizing rural credit, the economic team managed to make room to reduce interest rates on the controlled lines of the 2026/27 Harvest Plan for corporate agriculture by around 1.5 percentage points, CNN found. The cut was below that defended by Mapa (Ministry of Agriculture and Livestock), but was considered the possible limit given the pressure on the Budget and the cost of equalizing rates.

The announcement of the Safra Plan will be this Tuesday (30), at 10am, at Palácio do Planalto, in a ceremony led by the acting president, Geraldo Alckmin, and the Minister of Agriculture and Livestock, André de Paula.

President Luiz Inácio Lula da Silva will be in Asunción, Paraguay, to participate in the Mercosur Summit and, for the first time since his first term, will not participate in the launch of the main credit policy for medium and large producers.

Lula's absence occurs precisely at a time when the government is trying to improve dialogue with agribusiness. On the other hand, the Chief Executive will participate in the dissemination of the program for family farming, scheduled for the same day at 6 pm.

Behind the scenes, the assessment is that a reduction in interest rates, even if lower than desired by the sector, helps to reduce the political wear and tear of a Harvest Plan that will be announced under strong budget restrictions.

The negotiations were marked by a dispute between the economic team and Mapa. While the economic area defended caution in the face of reduced fiscal space and increased expenses with interest equalization, minister André de Paula and secretaries from the department pressed for a more robust cut in rates.

The objective was to return the main controlled funding lines to operating at single-digit interest rates.

In the 2025/26 harvest, the rates for controlled lines for corporate agriculture varied between 8.5% and 14% per year, with the main cost line remaining at 14%.

The proposal defended by Mapa would reduce this cost to below 10%, but the economic team's assessment was that the fiscal scenario did not support a movement of this magnitude.

According to sources interviewed by CNN, the reduction of approximately 1.5 percentage points represents the greatest possible effort without significantly increasing the cost of equalization.

With Selic at 14.25%, each additional reduction in subsidized interest increases the need for Treasury resources to compensate financial institutions.

In addition to the behavior of the basic interest rate, another factor limited negotiation.

A large part of the allocation allocated to subsidizing rural credit is already committed to contracts for the current harvest, while the government still needs to accommodate the necessary resources in the Budget to finance the first stage of the 2026/27 Harvest Plan.

Technicians involved in the negotiation also report concern about the limitations imposed by tax legislation in the year at the end of a mandate.

The final numbers of the program will still go through an extraordinary meeting of the CMN (National Monetary Council) scheduled for Tuesday (30), to give banks and financial institutions the conditions to operationalize the lines.

The expectation is that the resolutions will be published after 6pm.

Last harvest, the government announced R$516.2 billion for corporate agriculture, also considering the CPR (Rural Product Certificates) with mandatory targeting.

For this cycle, representatives of the sector defended a volume between R$623 billion and R$674 billion, without considering these resources, but members of the government recognize that the increase will be below what was requested due to budgetary limitations.

Source: CNN