Brazil Senate approves Pre‑Salt Social Fund for agribusiness debt renegotiation

The Brazilian Senate approved a bill authorising the use of the Pre‑Salt Social Fund, together with regional constitutional funds, to refinance the debts of rural producers who suffered losses from extreme climate events. The law sets special conditions for farmers who recorded losses in at least two harvests and offers interest rates between 3.5% and 7.5% per year. Unlike the earlier Chamber version that earmarked between R$ 30 billion and R$ 100 billion, the Senate text leaves the total amount to be determined by the executive.

The proposal, supported by agribusiness‑linked parliamentarians, aims to curb rising indebtedness in the countryside. The Ministry of Finance pushed for stricter eligibility criteria and higher interest, but many of its suggestions were rejected. Critics warn the fund’s diversion could reduce resources for other programs such as education, health and housing.

After the Senate vote, the government and the Frente Parlamentar da Agropecuária (FPA) entered a dispute over the bill’s progress in the Chamber of Deputies. The executive is seeking to delay the vote, negotiate with Chamber president Hugo Motta, and may consider a presidential veto or a challenge before the Supreme Court, citing fiscal‑responsibility concerns and alleged unconstitutionality. The FPA claims the measure would address up to R$ 170 billion of agribusiness debt, particularly in drought‑hit states such as Rio Grande do Sul.