Agribusiness entrepreneurs linked to former president Luiz Inácio Lula da Silva this week fine-tune the sector proposals that will be delivered to the PT presidential campaign, focusing on cheaper credit as an incentive to green practices, including the use of bio-defensives, and on expanding of the internet network in the field.
The design of the ideas, which are yet to be analyzed by the coordinators of Lula’s government program, echoes the central claim of agro to improve access to credit in Brazil and includes the proposal already endorsed by the campaign, revealed by Reuters, of creating a lower-interest line of credit for farmers converting pasture to farmland and a low-carbon economy.
The plan is an important tool for Lula, who is trying to attract the sympathy of a sector that, including inputs, accounts for about 25% of Brazilian GDP and mostly supports president and reelection candidate Jair Bolsonaro (PL), who is second in the polls. . PT has repeated that it is possible to support agricultural production while strengthening environmental measures that lead to zero deforestation.
The group of agro businessmen who have been working with Lula – among them are Carlos Ernesto Agustin and the former ministers of Agriculture Blairo Maggi and Neri Geller – proposes that access to cheaper green credit be greater or lesser according to the farmers’ adherence to sustainability and carbon emission reduction measures.
“We have to get ahead in this environmental issue. We have the technology for it. We just have to offer cheaper interest for the commitment to environmental improvement”, defended Agustin.
Brazil has a program focused on more sustainable agricultural practices, but resources are still limited, only 2% of the total budgeted for Plano Safra financing (R$ 341 billion). The program’s interest rates, although lower than others, rose to as much as 8.5% per year, in the wake of the Selic.
The other proposals of the agro group linked to the PT include, for example, the expansion of the use of biological pesticides and the incentive to offer benefits to employees in the sector, such as private health plans, social security, among others.
“Brazil is starting to specialize in biological pesticides…”, said Agustin, adding that the farmer is already able to manufacture this input on his own farm. “[O defensivo biológico] It may not replace 100% (the chemical), but it can start little by little,” he explained.
In all conversations with agro, improving access to credit is one of the central demands. Among the proposals is the opening for agricultural credit that uses resources that must be applied in loans to the sector to be operated by fintechs — an idea already discussed by the Brazilian Association of Fintechs with Geraldo Alckmin (PSB), vice president of Lula’s ticket, but that should only be analyzed in fact in the transition, in the case of election of the ex-president.
But the proposals go further. One of the complaints is that long-term contracts signed with high interest rates, such as the Selic rate at the moment, are signed without a review forecast in the event of interest reductions — a practice that is not only for agribusiness, but for several long financing, such as home ownership, for example. “It should at least have a variable interest”, defends Agustin.
Another proposal is the possibility of expanding financing in dollars — currently there is an option to finance using CPR (Rural Product Certificate) in dollars. The businessman explains that agriculture for export receives in dollars, so financing linked to the variation of the North American currency would not bring losses to the countryside.
“This is a dogma, not having financing in dollars. I sell in dollars, it makes no difference. There are new mechanisms that need to be studied”, he defended.
The agro proposal also includes the need to expand internet networks to the countryside. Agustin explains that, today, most agricultural machines are intelligent, but they need a connection to work properly, which is not available in most parts of the interior of the country.
The complete proposal should be delivered by the end of this week, in São Paulo, to Aloizio Mercadante, coordinator of the government program for Lula’s campaign, to be discussed internally.
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