Oct 15, 2010
Farm Groups Ask Judges to Stop Repossession of Equipment in Mato Grosso
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Mato Grosso have until today, October 15th, to renegotiate their outstanding debts with the Bank of Brazil and equipment dealers or face the repossession of the equipment that was purchased with these outstanding loans. Many of these problematic loans date back to 2003 and 2004 and they have been rolled over several times already. Each time the loan is rolled over, the total amount of the loan increases while at the same time, the value of the equipment declines. Even if the equipment is repossessed and sold at auction, the proceeds of the sale would only pay a small portion of the original note leaving the farmer with very few options for paying off the balance.
Repossession of equipment such as tractors, planters, and combines has already started in Mato Grosso and farm groups are petitioning local judges to suspend these activities at least until planting has been completed. The farmers are pointing out to the judges that the delayed start to the rainy season has delayed their planting activities as well. In a normal year in western Mato Grosso, the soybean planting window is 60 days, but this year it has been reduced to 30 days and they have not yet had the opportunity to plant their 2010/11 soybean crop. They point out to the judges that if they cannot plant their crops, it is going to make it even harder to pay off their loans.
The farm groups acknowledge that the loans must eventually be paid, but they are asking the judges to modify the process allowing farmers to at least have time to plant their crops.