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April 23, 2015

Brazil's Harvest Plan to be announced by President Rousseff May 19

The Brazilian Minister of Agriculture, Katia Abreu, announced earlier this week that details of the new Agriculture and Livestock Plan 2015/16 (often referred to as the Harvest Plan) will be released by President Rousseff on May 19th. The Minister indicated that the interest rates on production loans offered through the program will increase and that the increase will accompany the inflation rates of the last two years.

Inflation in Brazil in 2014 was approximately 6.5% and it is expected to be 8.5% in 2015. Indications are that the interest rates on the production loans issued in 2015 will be in the range of 8.5 to 9.0%, which the minister considers neutral when considering inflation over the past two years. She emphasized that other industries pay 12% or more for interest on their loans and that farmers are receiving a significant benefit from the government with the reduced interest rates.

The 2014/15 Harvest Plan was a record R$ 156 billion reals with interest rates of 6.5%.