Brazil cuts rural insurance funding amid agribusiness debt‑renegotiation push

The federal government has blocked a total of R$518 million from the Programa de Subvenção ao Prêmio do Seguro Rural (PSR) ahead of the launch of Plano Safra 2026/27. The first cut of R$461.7 million was made on 9 June, followed by an additional R$56.2 million, amounting to more than half of the programme’s 2026 budget. Agribusiness groups, including the Frente Parlamentar da Agropecuária (FPA) and the Sistema FAEP, argue the cuts will raise insurance premiums, limit coverage and jeopardise small‑ and medium‑scale producers who rely on the subsidy to manage climate‑related risks.

At the same time, lawmakers are debating Project 5.122/2023, a bill that would create a special credit line to renegotiate rural producers’ debts. The Ministry of Finance estimates the reform could cost up to R$140 billion over 13 years, while the FPA’s own analysis puts the fiscal impact at roughly R$65 billion. The proposal calls for interest rates of about 3.5 % per year and would draw on funds from the social fund and other sources. The FPA is urging accelerated voting in the Chamber of Deputies to address the “survival crisis” facing the sector.