Before talking about rural loans, it is important to mention that agribusiness in Brazil has the potential to lift more than 30 million people out of food insecurity.

And, still, to be a great protagonist of the economy in 2022, due to the high demand for food in both the domestic and foreign markets. 

If you are a rural producer, are a member of a cooperative or have a company that participates in agribusiness, you are eligible to apply for and receive a rural loan.

Rural credit is intended to finance agricultural and farming activities in all their production phases and harvest cycles.

Therefore, if you want to know more about this loan, read on and check it out!

Rural credit is financing for the purchase of inputs for planting or raising animals until the harvest or slaughter phase, respectively. The rural loan can cover, in addition to expenses involving agricultural production and livestock, renovations of rural homes, for example.

This type of credit aims to strengthen rural production in the country and you can apply through public or private financial institutions. 

Due to its importance for the development of the economy, rural credit can even be subsidized by the State, as it happens in several countries, including Brazil. In the country, the Safra Plan, a program that allows farmers to receive incentives to fund their activities, was created in 2003. 

Rural credit is more advantageous for those who adhere to it, as it offers financing with lower interest rates than other types of loans with less bureaucracy to obtain.

Due to the high demand for credit, according to the Ministry of Agriculture, Livestock and Supply, there was a 36% increase in the value offered in relation to the 2021/2022 Crop Plan, when R$ 251 billion were made available. 

In 2022, the Safra Plan released the value of more than R$ 340 billion to encourage agricultural activities in the country until June 2023. 

When looking for the institution that will finance your projects, it is important to know the types of loans possible and what they are intended for. In this case, there are four types of rural credit.

The first of these is costing credit, which is aimed at those who need investments in the production cycle, such as the purchase of seeds, fertilizers, inputs in general or who need to pay for the harvest stage. 

The investment credit, on the other hand, is intended for those who need funding for investments that will last for several harvests, such as, for example, the purchase of tractors. 

The commercialization credit aims to promote the commercialization of rural production products in the market. 

Finally, those who realized that the time has come to industrialize their products and services or need to expand their plans, the indication is to apply for the industrialization credit. 

This type of loan can finance, for example, the purchase of labels and packaging or the hiring of labor.

All amounts come from BNDES (National Bank for Economic and Social Development) and other institutional funds, with 60% from rural savings, 35% from LCAs (Agribusiness Letters of Credit) and 30% from all amounts deposited in banks.

The process to adhere to the rural loan is similar to other procedures for taking bank credit at financial institutions and requires some evidence for the rural credit to be released. 

Banking institutions require guarantees for the release of loans, which can be, for example, a rural property. Each bank has its requirements for guarantees, as well as each one has its list of documents needed for loan evaluation. 

Normally, identity, individual or legal person registration and certificates proving the activity carried out are required. 

In addition, to apply for loans offered by government programs, the interested party must first consult the requirements of each one of them, for example, to join the Pronaf (National Program for Strengthening Family Agriculture), it is necessary to request the aptitude statement in the responsible agency. 

All those who intend to pay for agricultural activities are eligible to apply for rural credit. 

It is worth mentioning that they do not need to be directly linked to agricultural production, but can also be other operations involving agriculture, such as scientific research, for example. Check it out below:

Those interested in obtaining a rural loan have several options to resort to, with the main operators being banks or credit unions. 

There are several institutions qualified to offer these loans, which follow the legislation of the SNCR (National Rural Credit System), such as:

Those applying for a loan should also be aware of whether they meet the criteria for applying to any government credit program. 

In this sense, borrowers can find rates ranging from 5% to 12.5% per year. However, before resorting to loans, it is important to assess the requirements of each institution. As well as what are its advantages. 

Through the Federal Government, it is possible to obtain loans from Pronaf (National Program for Strengthening Family Agriculture), Pronamp and other programs, such as Moderfrota (for the purchase of agricultural tractors or harvesters), Inovagro (for research and innovation) and PCA (focused on the purchase, construction and expansion of warehouses).

Pronaf is aimed at small farmers, agrarian reform settlers, fishermen, extractivists and sustainable management foresters, farmers who operate areas of up to 500 cubic meters of water or two hectares of water, quilombolas and indigenous people.   

This program was created in 1996 with the aim of developing rural areas, ensuring food security and has the lowest rates on the market. There are subprograms within Pronaf, such as Funding, Agroindustry, Women, Agroecology, Bioeconomy, More Food, Young People, Microcredit and Shares. 

Pronamp, on the other hand, is aimed at financing medium-sized rural producers, that is, those with gross income per year of up to R$ 2.4 million.

To apply for the rural loan, you must go to a bank that offers this financial product. In addition, you must gather all supporting documents required by each banking institution. This can vary according to each one of them.

Generally, institutions ask the interested party to meet the following requirements:

Some banks may require the interested party to submit a budget or plan for their investment project. There may also be inspection of the borrower's premises. 

To solve any type of doubt that may arise, the rural producer can consult the MCR (Rural Credit Manual), which contains all the rules established by the CMN (National Monetary Council) regarding rural credit.

Now that you know everything about rural loans, how about finding out how to apply for a loan for renovation? So, read the recommended post below and check it out!