Lula launches Record Crop Plan to get closer to agro – 06/25/2023 – Market

The government of Luiz Inácio Lula da Silva (PT) will launch the 2023/2024 Crop Plan in the coming days with a record volume of resources, in an attempt to get closer to ruralists, with whom the president has had a troubled relationship since the campaign. .

The Planalto Palace’s strategy is to seek to reduce resistance to PT members within the sector, which mostly supported Jair Bolsonaro (PL) in the last elections.

The Crop Plan, whose objective is to finance agricultural activity in Brazil, is seen as a password to try to improve the relationship with a segment that has driven economic growth at the beginning of the year.

In recent weeks, several departments have been involved in meetings to define the main variables of the plan: total portfolio of available resources, amount for subsidized lines and interest rates.

According to people participating in the negotiations, the total value of the Safra Plan should be between R$ 420 billion and R$ 430 billion.

The value frustrates the request of the ruralists, who aimed to reach a total portfolio of R$ 470 billion in financing. Even so, the amount represents a strong increase in relation to the BRL 340.9 billion launched by Bolsonaro for the 2022/2023 harvest.

The details of the program are being drawn up to ensure increased resources, including for agribusiness entrepreneurs, a sector in which there is a great focus of criticism of Lula. The forecast is that the funding line aimed at the business segment alone will have around R$ 100 billion – well above the almost R$ 75 billion reserved for this purpose in Bolsonaro’s last plan.

At the same time, there will be a reserve of resources to encourage sustainable practices indicated by the MMA (Ministry of the Environment), which has been called by technicians the environmental induction component. In his third term, Lula seeks to use preservation and sustainability as hallmarks of his government.

In addition to the historical record in volume, Lula is expected to announce some reduction in the plan’s interest rates, although there is limited space in the Budget to significantly expand subsidies.

According to technicians involved in the discussions, there will be a cut in rates on all equalized lines (when the government pays part of the interest to reduce the cost of financing the borrower), with emphasis on the Mais Alimentos program.

The initiative, launched for the first time in 2008 (Lula’s second term), should finance the purchase of machinery and equipment for family farming at lower interest rates. In addition to encouraging food production, the government considers that the resumption of this line will boost the sale of tractors and machines in the country.

On the environmental side, there is still doubt about how much it is possible to reduce interest rates for producers who adopt sustainable practices.

The announcement of the plan is scheduled for this Tuesday (27) and Wednesday (28). On the first day, the forecast is to deal with resources linked to the Map (Ministry of Agriculture and Livestock). The portion of the MDA (Ministry of Agrarian Development) would remain for the second day.

The schedule was discussed in recent days between Lula and ministers Carlos Fávaro (Agriculture), Paulo Teixeira (Agrarian Development), Fernando Haddad (Finance) and Rui Costa (Casa Civil).

Since then, technicians have been poring over the details to be able to finalize the total costs of each segment and lines to be made available.

In the first six months of government, Lula and his allies adopted the discourse that the government will provide all the necessary conditions for the agro to grow in the coming years, appealing to the memory of the actions adopted in the first two terms of the PT to please the sector, as a extensive debt renegotiation.

The recent history, however, is of a more troubled relationship. Ruralist leaders remember that, during the electoral campaign, Lula referred to part of the sector as “fascist and rightist”. Already in office as president, the PT said on June 15 that the agribusiness problem with his management is “ideological”, not linked to economic issues.

The launch of Plano Safra is seen at the Planalto Palace as an opportunity to showcase a robust program to finance agriculture in the country. The ruralist caucus of Congress was invited to both events — in yet another demonstration of the government’s attempt to appease feelings.

President of the FPA (Frente Parlamentar da Agropecuária), one of the most influential groups within Congress, deputy Pedro Lupion (PP-PR) dodged when asked if the record Harvest Plan will be enough to reduce the sector’s resistance to Lula .

“This is the government’s obligation. The Crop Plan is a State policy. It is not a question of one government or another. It is what helps Brazil to be as competitive as it is,” he said.

“Past PT administrations have always had positive presentations in relation to the Safra Plan. We are going to hope that it continues to do so,” he added.

Minister Paulo Teixeira met in recent days with members of the FPA to talk about the Safra Plan, listen to the demands of the ruralists and also the criticisms of land invasions by the MST.

“In my opinion, the MST also plays an important role in Brazil. They have their cooperatives, which produce milk, butter, etc. Today we have to reach an understanding. The greater the tranquility of our relations, the more we will be able to produce and to be a more socially balanced country”, stated Teixeira.