Overdue debts of Brazilian agribusiness reached R$ 48 billion in June, up from R$ 2 billion in June 2021, a 2,300% increase, according to a UOL report published on Sunday (13). The wave of defaults has changed how banks deal with the sector: they are restricting credit for the coming harvest and taking over farms from producers who could not repay their loans.
One case cited by UOL is Fazenda Santo Antônio, in Peixe, southern Tocantins state, valued at R$ 9.6 million and now owned by a bank. The former owner, a cattle raiser, lost the property after failing to pay off his loans.
Credit for the harvest shrinks
The squeeze shows up in Central Bank data compiled by Farsul, the farm federation of Rio Grande do Sul, in a technical note. The productive area financed through crop loan lines of the Plano Safra, Brazil's federal farm credit program, fell from 34.2 million hectares in July 2025 to 25.4 million in July this year, a drop of nearly 26% in 12 months. In Rio Grande do Sul, the decline was 29.3%. Rural credit disbursed, excluding private market securities, fell 12% to R$ 181.1 billion, and the number of contracts dropped 10.3% to 777,800.
In July, 23.5% of the banking system's active rural credit portfolio was classified as problematic: R$ 207.5 billion in balances in default, overdue, renegotiated or extended. Farsul partly blames resolution 4.966 of the National Monetary Council, a provisioning rule in force since January that forces banks to recognize expected losses earlier when portfolios deteriorate.
Risk for food prices
Farsul says the effects of scarcer credit will show up with a lag precisely in the 2026/27 harvest, whose planting starts now. The still positive indicators, the federation argues, reflect crops financed before the credit squeeze worsened.
The effects of scarcer credit today tend to appear, with a lag, in the 2026/27 harvest, in GDP, in the trade balance, in the exchange rate and in food prices, just when inflation starts to show signs of easing.
Producers can turn to private instruments, such as CPRs, commodity-linked notes whose stock reached R$ 576.4 billion in June, up 12% in 12 months, and Fiagro agro investment funds, up 81% in two years. Farsul says these sources cushion the gap left by banks but remain out of reach for many small and mid-sized growers. For consumers, the risk is supply: if less credit means less planted area and lower yields, the current relief in food prices may reverse, hitting lower-income households hardest.