“The risk of a domino effect is significant, especially as the crisis affects the base of the production chain…”
Jônatas Pulquerio is an agribusiness consultant, expert in risk management, rural insurance and agricultural policies. He has law degree from the University of Cuiabá and administration degree from Univag, with an MBA in agribusiness from ESALQ.
Jônatas Pulquerio, consultant
Pulquerio served as director of risk management at the Ministry of Agriculture’s Agricultural Policy Secretariat, where he led strategic initiatives to strengthen security and sustainability in agriculture.
AgriBrasilis – What is the reason for the increase of default and bankruptcy protection cases in Brazilian agriculture?
Jônatas Pulquerio – This increase is driven by several factors. I could highlight: the drop in commodity prices, which reduces farmers’ income; climate change, which compromises yields; the increase in production costs, pressured by more expensive inputs and costly financing.
Furthermore, many farmers operate outside the formal banking system and depend on the input and resale chain, making them more vulnerable in times of crisis.
AgriBrasilis – Will we see more bankruptcy protection cases in the coming months?
Jônatas Pulquerio – It’s likely that we will. With low liquidity and short-term debts maturing, many farmers may seek bankruptcy protection as an alternative to restructure their finances.
Although the crisis is not yet systemic, the absence of effective emergency measures by the government and the market could worsen the scenario and increase the number of requests for judicial reorganization/bankruptcy protection.
AgriBrasilis – What is the risk of a large-scale domino effect regarding this crisis?
Jônatas Pulquerio – The risk of a domino effect is significant, especially as the crisis affects the base of the production chain.
Although the current scenario is still contained, a lack of coordinated action between government and market could allow the situation to escalate, compromising other stages of agribusiness and impacting interdependent sectors. Therefore, it is essential to act now to avoid a worse situation.
AgriBrasilis – The big problem is the lack of liquidity with the maturity of short-term debts. Is the situation temporary?
Jônatas Pulquerio – The lack of liquidity can be reversed, but it depends on quick and effective measures. The problem lies in short-term debts, which mature at a time of low revenue and high costs. Without renegotiating deadlines and new credit flows, the situation could prolong, worsening the vulnerability of farmers.
AgriBrasilis – Why, in your assessment, is the Safra Plan “disconnected from reality”?
Jônatas Pulquerio – The “Plano Safra” (Brazilian Government’s Agricultural Credit Plan) has not kept up with changes in the sector and primarily serves the banking system, which uses agricultural credit to sell service packages, increasing the final cost for the farmers. Furthermore, many farmers negotiate their production outside the banking system, directly with input dealers, leaving them unassisted in times of crisis.
A reform of the Plano Safra is urgent to bring it closer to the needs of the farmers and to integrate more efficient market instruments, such as Fiagro Reorg, currently under debate between the Central Bank, Febraban, Government and the capital market.
Instruments such as Fiagro (Investment Funds in Agroindustrial Chains) are essential for solving liquidity and solvency problems, as they allow extending the term of debts and make it easier to obtain credit, offering greater flexibility to the farmers.
AgriBrasilis – How is financing provided to small farmers? Is this model sustainable?
Jônatas Pulquerio – The “Plano Safra” (Brazilian Government’s Agricultural Credit Plan) offers affordable credit to many small farmers, but not all of them are able to meet the banking requirements and end up negotiating with the input chain and input dealers.
Although the private market is moving faster than the government, there is still a lack of a consolidated incentive policy, such as discounts and prizes for those who adopt sustainable practices. The government needs to better structure its policies to ensure that rural financing is more comprehensive and sustainable in the long term.
AgriBrasilis – Are there any opportunities in this time of crisis?
Jônatas Pulquerio – Yes, every crisis brings opportunities. More education and good practices can be the key to recovery. The government can better align its communication with farmers, offering training in family succession, governance, rural insurance and sustainable practices. Furthermore, the use of agricultural technologies and the transition to more sustainable production models can open doors to new markets and improve the competitiveness of farmers in the medium and long terms. This moment is also an opportunity for the government and the market to strengthen the use of innovative financial instruments, such as Fiagro, and facilitate access to credit for all types of farmers, considering the different regional realities in Brazil.
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