June 18, 2019 / 10:04 PM / 4 months ago

Brazil holds agricultural financing volume for 2019-20 steady, raises borrowing costs

SAO PAULO, June 18 (Reuters) - Brazilian farmers will have 222.7 billion reais ($57.7 billion) in financing for the 2019-20 crop, and interest rates will rise for the largest producers as the Brazilian government tries to curb its large deficit.

Agriculture Minister Tereza Cristina Dias said in a press conference on Tuesday the government will also try to develop new financing sources.

Total financing will rise only 0.28% from last year, but interest rates will rise for larger producers with the annual interest rate increasing from 7% a year to 8%. The Agriculture Ministry said the government opted to charge more in the financing due to the need of balancing the federal budget.

Dias said president Jair Bolsonaro will publish a decree with stimulus measures to agricultural financing, such as new refinancing conditions for producers that will use funds from Brazil’s development bank BNDES.

The decree will also allow debt certificates guaranteed by the crops to be issued in dollars, to ease the purchase by foreign investors. ($1 = 3.8608 reais) (Reporting by Tatiana Bautzer)

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