Brazil’s 2025 budget proposes R$300 million increase for CONAB and R$148 million for EMBRAPA, focused on food stabilization and research, despite not meeting full requests. Funding for rural credit, insurance remains unaddressed. Proposed adjustments are pending Congress approval.
Brazil is set to enhance its funding for the Companhia Nacional de Abastecimento (CONAB) and the Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) in its 2025 budget. CONAB will receive an additional R$300 million to bolster regulatory grain reserves aimed at controlling food inflation, while EMBRAPA will benefit from an extra R$148 million allocated for research initiatives. These requests, however, do not meet the original demands from the respective state-run entities.
The Ministry of Planning and Budget has proposed these adjustments to the Joint Budget Committee (CMO) of the National Congress, aiming to amend the 2025 Annual Budget Bill (PLOA). A vote on the changes is anticipated next week, though further amendments may occur prior to final approval.
Notably, there is no added funding available for subsidizing rural credit interest rates. Concerns persist among the economic team and the Ministry of Agriculture regarding the sufficiency of the initial PLOA budget, which allocates R$14 billion and an additional R$4.1 billion through emergency credits released earlier this year, for the upcoming 2025/26 Crop Plan.
Furthermore, the rural insurance sector will not see any increase in funding. The premium subsidy program (PSR) will remain at R$1.06 billion, although a portion of this budget has already been allocated for policies contracted in 2024. Approximately 10,000 agreements totaling R$67 million in subsidies are affected by previously imposed budget cuts.
In an official communication to the CMO, Planning Minister Simone Tebet articulated that these budget modifications reflect “reallocations requested by the relevant agencies due to shifting priorities or new needs.” This statement comprehensively outlines budgetary adjustments both for increases and reductions relative to the original budget proposal.
Moreover, the Ministry of Agriculture will experience a R$300 million reduction from its initial economic subsidies allocation of R$527.8 million aimed at maintaining stable agricultural product prices. This amount will be redirected to CONAB, which had initially sought an additional R$350 million as expressed by CONAB President Edegar Pretto.
The initial allocation for stockpiling through the Federal Government Procurement (AGF) program was R$189.9 million, which permitted CONAB to purchase crops when market prices fell below the minimum. With the new funds, CONAB anticipates a capacity to procure up to 445,000 tonnes of grains, an increase from the prior expectation of nearly 230,000 tonnes.
In conjunction with these adjustments, the Planning Ministry has sought to retract R$68 million from the Agriculture Ministry’s original AGF subsidy budget, decreasing it from R$234.1 million to R$166.1 million. Likewise, EMBRAPA will see an augmentation of its budget for research, development, and technology transfer, nearly doubling to R$285.4 million with an increment of R$148 million.
However, this is significantly lower than the R$500 million EMBRAPA requested to sustain existing projects, endorse new research proposals, and maintain its research facilities. EMBRAPA has indicated it requires a minimum of R$320 million for these purposes. Additionally, an extra R$20 million has been proposed for the upkeep and modernization of EMBRAPA’s facilities, raising the total to R$200.6 million.
Lastly, an increase of R$400 million for the Ministry of Social Development and Assistance (MDS) is also proposed to facilitate food procurement and distribution from small farmers. This would inflate the total food procurement budget to R$1.1 billion, with CONAB managing R$900 million and municipalities in collaboration with MDS handling R$283.6 million.
The Brazilian government’s budget for 2025 reflects a strategic allocation of funds aimed at strengthening agricultural support and food security initiatives. Notable increases for CONAB and EMBRAPA signal an emphasis on addressing food inflation and enhancing agricultural research. However, concerns linger regarding the adequacy of funding for rural credit and insurance, which are vital for the agricultural sector’s sustainability. The next steps in budget approval will determine the final allocations.
Original Source: valorinternational.globo.com
