Brazil Senate OKs Pre‑sal Fund Plan to Refinance Rural Debt

The Brazilian Senate approved Bill 5122/23, authorising the use of the Social Fund of the Pre‑sal oil revenues, together with the North, Northeast and Central‑West Constitutional Financing Funds, to refinance indebted farmers and cooperatives that suffered losses in at least two harvests between 2019 and 2025 due to extreme climate events or price drops linked to geopolitics.

The measure creates a special credit line with repayment terms of up to ten years, including a three‑year grace period, and interest rates ranging from 3.5% to 7.5% per annum. Individual limits are set at R$10 million for small producers (Pronaf) and R$50 million for cooperatives, with the executive branch deciding the total amount to be allocated.

Senate President Davi Alcolumbre and rapporteur Renan Calheiros pushed the bill forward despite the federal government’s opposition, which warned of a possible fiscal impact of up to R$140 billion. The proposal now returns to the Chamber of Deputies for further consideration.