Jul 07, 2025
2025/26 Harvest Plan Announced in Brazil, Higher Interest Rates
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
On July 1st the Brazilian government launched their 2025/26 Harvest Plan (Plano Safra), which is their equivalent of the U.S. Farm Bill, but it is done on an annual basis. The major component of the Harvest Plan is lower interest subsidized loans for production, marketing, and investment operations. The interest rates vary depending on the size of the producer and what is being financed. The program will run from July 1, 2025 to June 30, 2026.
The 2025/26 plan will allocate R$ 516.2 billion to business agriculture which represents an increase of R$ 8 billion compared to the previous year. Aimed at medium and large producers, the interest rates were increased 1.5% to 2% compared to last year, ranging from 8.5% to 14%. As a reference, the Selic, which is Brazil's prime rate, is 15%. There will be R$ 78.2 billion allocated to small family farmers bringing the total to R$ 595.4 billion for the agriculture sector (approximately USD 108.2 billion using an exchange rate of 5.5 Brazilian reals to the dollar).
Farmers are concerned that the increased interest rates make credit practicable inaccessible to most producers, especially at a time of high indebtedness and low commodity prices. The president of Aprosoja/MT contends that this program has less money available for producers compared to last year when inflation and other factors are considered.
The new plan establishes an interest rate of 10% per year for Pronamp (the National Support Program for Medium Rural Producers) and between 8.5% to 14% for other cost and investment operations, depending on the size and purpose of the financing. For many small and medium-sized producers, these rates make access to credit unfeasible, especially when much of the budget needs to be earmarked for the discharge of previous debt.
Bottom Line - With the higher interest rates in the 2025/26 Harvest Plan, many farmers are going to find it difficult to qualify for credit especially at a time of depressed commodity prices. They will need to be very stringent on their spending for crop inputs, equipment, or infrastructure.