The Climate Policy Initiative at the Pontifical Catholic University of Rio de Janeiro on Monday published a study showing that access to credit is limited and unequal for family farmers. Among these properties, credit is concentrated in bigger properties located in the South and dedicated to producing grains. Rural credit is Brazil’s main agricultural policy. […]
The post Study shows how unequal access to rural credit is in Brazil appeared first on The Brazilian Report.
The Climate Policy Initiative at the Pontifical Catholic University of Rio de Janeiro on Monday published a study showing that access to credit is limited and unequal for family farmers. Among these properties, credit is concentrated in bigger properties located in the South and dedicated to producing grains.
Rural credit is Brazil’s main agricultural policy. The government earmarked BRL 13.6 billion (USD 2.7 billion) for the 2023-2024 Harvest Plan — BRL 8.5 billion of which is destined to subsidize family agriculture.
Family farmers represent the majority of rural properties in Brazil. These producers face financial constraints that make them more vulnerable, as well as making it hard for them to modernize, adopt new and sustainable technologies, and increase productivity.
Still, only 15 percent of family farmers obtain credit, with rates varying greatly according to the size of their properties. While 20 percent of producers who own between 10 and 100 hectares take credit, this number is only 10 percent for producers with up to 4 hectares.
“There are also relevant geographic differences,” the study says, “with 29 percent of producers in the South accessing credit, while in the North, this percentage is only 9 percent.” Contracts in the South are worth an average of BRL 1,451 per hectare — or 18 times higher than those in the North (BRL 83).
Producers dedicated to cattle ranching, corn, soybeans, and wheat — important products in the country’s basket of exports — eat up the lion’s share of available credit. “Policymakers need to consider differences related to size, regions, and products in order to expand the coverage of financial services for currently excluded producers,” the study analyzes.
In recent years, the federal government has made efforts to increase access to credit to family farmers — whether by allocating a larger chunk of Harvest Plan funds to these producers, or cuts in interest rates for farmers producing basic foodstuffs.
The post Study shows how unequal access to rural credit is in Brazil appeared first on The Brazilian Report.
