Brazil’s 2025 budget includes R$300 million for CONAB to bolster grain reserves and R$148 million for EMBRAPA’s research. The proposed allocations, however, are below the entities’ requests, while no additional funding is designated for rural credit or insurance. The adjustments reflect a strategic response to current agricultural priorities amid rising commodity costs.
In the proposed 2025 budget, Brazil’s Companhia Nacional de Abastecimento (CONAB) will receive an additional R$300 million to enhance its regulatory grain reserves, designed to mitigate food inflation. Conversely, the Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) will obtain an increment of R$148 million for its research initiatives, although these amounts do not meet the entities’ full requests.
The Ministry of Planning and Budget has submitted these proposed increases to the Joint Budget Committee (CMO) for the National Congress this week. This amendment to the 2025 Annual Budget Bill (PLOA) is set to be voted upon next week, with the possibility of further modifications before its ratification.
The budget does not allocate additional funding for interest rate subsidies on rural credit, prompting concerns from the economic team and the Ministry of Agriculture. The current 2025/26 Crop Plan budget of R$14 billion, supplemented with R$4.1 billion emergency credit in February, is perceived as inadequate by stakeholders.
No increase is provided for rural insurance; the premium subsidy program (PSR) will retain a budget of R$1.06 billion for 2025. However, part of this budget has already been designated for fulfilling obligations from 2024 due to prior budget reductions, affecting around 10,000 contracts involving R$67 million in subsidies.
In a letter to the CMO, Planning Minister Simone Tebet indicated that the budget modifications pertain to “reallocations requested by the relevant agencies due to shifting priorities or new needs.” The letter specified areas designated for budget increases and reductions in relation to the preliminary proposal.
The Ministry of Agriculture will experience a R$300 million reduction from its original economic subsidy allocation of R$527.8 million, reallocating these funds to CONAB. This shift reflects the government’s assessment that less financial support will be necessary for price stabilization of agricultural products in the upcoming year due to rising commodity prices.
With President Lula mandating a bolstering of food reserves, the newly allocated funds will support CONAB. Nonetheless, CONAB President Edegar Pretto indicated that the agency initially sought an additional R$350 million to meet its needs.
Previously, the PLOA allocated R$189.9 million for stockpiling via the Federal Government Procurement (AGF) program, which permits CONAB to acquire crops when market prices fall below specified thresholds. The new funding will allow CONAB to obtain approximately 445,000 tonnes of grains as opposed to the previous estimate of 230,000 tonnes with the original budget, primarily consisting of rice, beans, and corn.
Moreover, the Planning Ministry has proposed a cancellation of R$68 million from the Agriculture Ministry’s initial AGF subsidy, reducing it from R$234.1 million to R$166.1 million.
EMBRAPA is also set to receive budget enhancements for research and technology transfer, increasing its initial allocation from R$137.4 million to R$285.4 million. Despite this rise, the budget still falls short of EMBRAPA’s demand for R$500 million from the federal government.
An EMBRAPA spokesperson stated that a minimum of R$320 million is necessary to sustain ongoing and new research projects, as well as to uphold its existing facilities. Additionally, the Planning Ministry has requested R$20 million for maintenance and modernization efforts, elevating the total budget for such improvements to R$200.6 million.
Lastly, a proposed increase of R$400 million for the Ministry of Social Development and Assistance (MDS) aims to support the procurement and distribution of food from small producers through initiatives like the Food Acquisition Program (PAA). This will raise the overall food procurement budget to R$1.1 billion, with R$900 million managed by CONAB and R$283.6 million coordinated by municipalities in conjunction with the MDS.
The Brazilian government is set to enhance funding allocations for CONAB and EMBRAPA to strengthen food security and agricultural research in the 2025 budget. Despite these increases, concerns linger regarding the sufficiency of funds for rural credit and insurance. The government believes that the adjusted budget reflects strategic reallocations to align with agricultural priorities amid rising commodity prices. Close monitoring of the implementation and impact of these budgetary provisions will be essential as the vote approaches.
Original Source: valorinternational.globo.com
