Lula Unveils Record Crop Financing Plan in Bid for Brazilian Farmers’ Support

(Bloomberg) -- President Luiz Inacio Lula da Silva unveiled a record-breaking amount of funding to support Brazil’s massive agricultural sector, his latest attempt to win over farmers who have broadly opposed his government.

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The government will devote roughly 400 billion reais ($71.8 billion) to the country’s agribusiness sector as part of its Plano Safra crop financing plan, Lula and Agriculture Minister Carlos Favaro announced Wednesday, marking the second consecutive year it has set a record under Lula. The plan will also put 76 billion reais toward financing for family farmers, according to the government.

Plano Safra is a government plan that provides credit to Brazil’s farms and ranches. The country’s substantial agricultural industry accounts for a roughly a quarter of its gross domestic product and makes it one of the world’s largest exporters of coffee, soybeans, beef and other products.

But farmers often still require assistance for investments and other improvements, and have lately struggled with tighter credit conditions. They also faced lower prices over the first half of 2024 compared to the same period last year.

Brazil’s influential agribusiness sector has largely remained opposed to Lula’s government, despite efforts to earn its support.

Congressional lawmakers linked to the industry, many of whom remain aligned with former President Jair Bolsonaro, have blunted key legislative goals and have promised to unleash an offensive against the leftist leader’s green agenda this year.

Lula has also sought to use the plan to bolster his efforts to foster a green transition of Brazil’s economy, adding sustainability incentives and increased funding for low-carbon producers to the program last year.

--With assistance from Daniel Carvalho and Beatriz Reis.

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