Brazil’s proposed 2025 budget includes an additional R$300 million for CONAB and R$148 million for EMBRAPA to enhance food reserves and agricultural research, respectively. However, these amounts fall short of the agencies’ requests. The Ministry of Planning’s adjustments reflect a strategic focus on addressing food inflation, despite continued concerns over funding for rural credits and insurance.
Brazil plans to enhance its funding for the Companhia Nacional de Abastecimento (CONAB) and the Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) in the 2025 budget. The proposed budget allocates an additional R$300 million to CONAB to bolster regulatory grain reserves, aimed at mitigating food inflation. Meanwhile, EMBRAPA will receive an increase of R$148 million to support research projects, although these figures do not meet the entities’ original requests.
The Ministry of Planning and Budget has submitted these proposed increases for approval to the Joint Budget Committee (CMO) of the National Congress, where a vote is expected next week. While adjustments may be made before final approval, the initial suggestions indicate a focused financial strategy for agriculture, despite notable shortfalls in other areas.
Notably, no extra funding for interest rate subsidies on rural credit has been included, despite concerns voiced by the economic team and the Ministry of Agriculture. The projected R$14 billion budget for rural credit, along with an additional R$4.1 billion from emergency measures earlier this year, may not suffice for the 2025/26 Crop Plan.
The rural insurance program will also not see an increase, with a total budget of R$1.06 billion for 2025. A portion of this budget has already been allocated to cover previous commitments, leaving only R$67 million for new contracts among farmers and insurers.
Planning Minister Simone Tebet, in correspondence with the CMO, indicated these budget adjustments are based on “reallocations requested by the relevant agencies due to shifting priorities or new needs.” Such changes include a R$300 million reduction in the Ministry of Agriculture’s economic subsidies aimed at stabilizing agricultural prices, with funds being shifted to bolster CONAB.
With President Lula prioritizing food reserves, the government has redirected funding toward CONAB, despite its request for an additional R$350 million. The initial budget designated R$189.9 million for stockpiling through the Federal Government Procurement (AGF) program, enabling CONAB to procure approximately 230,000 tonnes of grains, a figure expected to increase to 445,000 tonnes with the new allocation.
The Ministry of Planning also suggested a reduction of R$68 million from the Agriculture Ministry’s AGF subsidy, changing the allocation from R$234.1 million to R$166.1 million. EMBRAPA’s funding for research initiatives is proposed to increase substantially, but remains significantly lower than its required R$500 million.
Furthermore, the Planning Ministry has called for an additional R$20 million to maintain and modernize EMBRAPA’s physical infrastructure, increasing its total allocation to R$200.6 million. An additional R$400 million is proposed for the Ministry of Social Development and Assistance (MDS) to support food acquisition from small farmers, bringing total food procurement funding to R$1.1 billion.
In summary, Brazil’s 2025 budget proposes increased allocations to CONAB and EMBRAPA, aimed at strengthening food reserves and agricultural research. While these adjustments reflect the government’s commitment to countering food inflation, they do not fully meet the initial requests of the agencies involved, and deficiencies in funding for rural credit and insurance remain a point of concern. Overall, the budget reflects a strategic focus on agricultural stability and food security amid rising commodity prices.
Original Source: valorinternational.globo.com
