Brazil agribusiness credit crisis spreads to suppliers and service providers

A surge in judicial recoveries among Brazilian farmers is now affecting the wider agribusiness supply chain. A study by consultancy RGF Associados identified 313 companies in the sector undergoing recovery proceedings, with machine wholesalers up 88.9%, raw‑material wholesalers up 64.7%, pesticide dealers up 32.4% and dairy firms up 21.2%. The contagion follows a typical lag: producers default first, and after about three quarters the effect reaches dependent firms. The downturn is driven by falling commodity prices, high interest rates, rising production costs and climate‑related losses, while the delayed impact of Selic cuts prolongs credit scarcity.

At the same time, Brazil's Congress is preparing legislative measures to address rural credit and insurance. Proposals include PL 5.122/2023 on credit reform, MP 1.376/2026 for debt renegotiation, PL 3.123/2025 to create a shared rural‑product data platform, and the broader "Lei do Agro 3" package that could add roughly R$800 billion to credit availability for the sector.