The government announced a record amount of R$400.59 billion for commercial agriculture, 10% above the R$364.2 billion offered in the 2023/24 Crop Plan. Interest rates remained stable. The only line that saw a reduction was the Business Moderfrota (a program that provides financing for the modernization of agricultural machinery), which dropped to 11.5% per year from 12.5% per year. Investment lines continue to have rates between 7% and 11.5%, and cost lines remain at 8% for medium-sized and 12% for large farmers.

The government also announced that financing of Rural Producer Bill (CPR) with directed funds from Agricultural Credit Bills (LCAs) will total another R$108 billion for commercial agriculture.

“Since we couldn’t do both things—increase the volume of money and reduce interest rates—we opted to increase the volume of money and further support Brazilian agriculture with funds from the Crop Plan,” Agriculture Minister Carlos Fávaro told reporters after the plan’s launch, which was attended by President Lula and Finance Minister Fernando Haddad.

Mr. Fávaro noted that the plan’s preparation was impacted by economic movements, such as a “flight of investors” from rural savings and cash deposits, important sources of rural credit, due to the maintenance of the Selic policy interest rate at 10.5% per year.

“One of the side effects of high interest rates, with the policy rate at this level, is that rural savings and cash deposits start to dwindle. Who would put money in investments that pay 7% or 8% per year if the policy rate is 10.5% and any alternative pays more than 12%?” said Mr. Fávaro. “This meant R$60 billion less that would not have costs for the Treasury. This flight of R$60 billion had an impact,” he added.

While the plan’s interest rates, in general, were maintained, the minister announced that the premium—discount on cost rates—for farmers with sustainable practices would be extended to all farmers this season.

In addition to the 0.5-percentage-point rebate for farmers included in the Rural Environmental Registry (CAR), those with sustainable activities certified by institutions endorsed by the Ministry of Agriculture will also have access to the same discount rate. “Some say this is very little. Only 1.76% of farmers managed to have their CAR analyzed. Yes, just for that, they already deserve a medal for the marathon of environmental compliance,” he said. “But the extension of benefits will be for all rural producers,” he added.

During the Crop Plan launch, Mr. Haddad praised the agribusiness caucus in Congress, with whom he negotiates items of the tax reform. “I have had the pleasure of talking with the Agriculture Parliamentary Front (FPA) to negotiate the tax reform. It is a strong caucus, but one that is committed to a national project. The relationship has been very respectful, I have received the FPA numerous times, and I think this is a demonstration of the maturity of our business class,” he said.

President Lula also addressed the sector, saying his administration made a “better” plan than the one launched by “those who seem to like you and do not.” “We make a better Crop Plan than those who seem to like you and do not. I will never ask anyone who they voted for,” he said at the ceremony.

Mr. Fávaro confirmed at the event that the Crop Plan for Business Agriculture will have an increase in the budget for interest rate equalization of rural credit. Medium and large farmers will have R$5.9 billion out of the R$16.3 billion made available by the National Treasury for this season.

According to the minister, the amount of resources grew by about 40%, and the weighted cost of crops of the main agricultural products fell by 23%. “This Crop Plan will have 63% more efficiency than the last plan of the previous administration,” he said. “It is the government increasingly encouraging agriculture.”

He also announced the allocation of R$210.9 million for the Rural Insurance Premium Subsidy Program (PSR) in extra resources to support the hiring of rural producers in Rio Grande do Sul, which suffered from floods. As a result, he stated, the resource applied to the PSR in the state in 2024 will rise to R$368.3 million, including what has already been released or is scheduled from the general policy budget of R$947.5 million this year.

The extra resources will allow the number of farmers served by insurance in Rio Grande do Sul to increase from 12,000 to 26,000, according to the minister. The covered area should increase from 669,000 to 1.2 million hectares. The insured value should double to R$11 billion.

He also said that President Lula ordered an increase in the budget for rural insurance in the 2025 Budget Guidelines Act. However, he did not mention the amount to be allocated to the PSR next year. “It is a super Crop Plan, but we also need insurance,” he emphasized.

The supplementation was lower than requested by the sector, but Mr. Fávaro’s assessment is that the extra amount for Rio Grande do Sul will relieve pressure on the resources available until December for the rest of the country, making them last longer.

The minister reinforced that the 2024/25 Crop Plan should stimulate the increase in rice production in the country and the diversification of cultivation areas through the launch of option contracts.