Brazil Senate passes controversial rural debt renegotiation bill

The Brazilian Senate approved a bill that renegotiates debts of large agricultural producers without an agreement with President Lula's government. The measure, labelled a “pauta‑bomba”, is projected to cost around R$ 817 billion over 13 years, while the Finance Ministry estimates a possible fiscal impact of up to R$ 140 billion in the next decade. The law sets interest rates at 3.5%, 5.5% and 7.5% for different credit lines, expands eligibility to credit‑rural operations, CPRs and overdue loans, and limits financing to R$ 10 million per producer and R$ 50 million per cooperative for a ten‑year term.

Federal deputy Sanderson (PL‑RS) criticised the Senate's decision, rejecting the “pauta‑bomba” label and arguing that the proposal does not raise constitutional questions that would warrant a challenge from the Supreme Court. He emphasized that the credit lines are authorising measures, not mandatory budget allocations, and warned that any government appeal to the STF would be unwarranted. President Lula is expected to veto the bill, and the government may consider legal recourse if the veto is overridden.