In Brazil’s 2025 budget proposal, CONAB will receive an additional R$300 million for grain reserves, while EMBRAPA is set to gain R$148 million for research. Despite these increments, both allocations fall short of initial requests. No additional funding is designated for rural credit subsidies or insurance, raising concerns within the agricultural sector. Further votes on the budget amendments are expected next week.
In the proposed 2025 budget, Brazil’s Companhia Nacional de Abastecimento (CONAB) is slated to receive an additional R$300 million aimed at bolstering regulatory grain reserves in response to food inflation concerns. The Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) will also see a R$148 million increase for its research projects, although both amounts fall short of the entities’ original requests.
The Ministry of Planning and Budget has submitted these proposed increases to the National Congress’s Joint Budget Committee (CMO). A forthcoming vote on the amendments to the 2025 Annual Budget Bill (PLOA) is expected next week, with possible further adjustments before final approval.
Notably, no extra funds have been allocated for rural credit interest rate subsidies, raising concerns among the economic team and the Ministry of Agriculture about the sufficiency of the initial PLOA budget of R$14 billion, which now includes an additional R$4.1 billion from emergency credit earlier this year for the 2025/26 Crop Plan.
Furthermore, the rural insurance sector will not receive an increase in funding. The premium subsidy program (PSR) has a budget of R$1.06 billion for 2025. However, part of this budget is already earmarked for covering policies contracted in 2024, resulting in potential funding shortages for new contracts involving R$67 million in subsidies for about 10,000 agreements.
Planning Minister Simone Tebet indicated that these budget adjustments reflect necessary reallocations suggested by relevant agencies due to evolving priorities. The ministry’s correspondence points out which areas will experience funding increases or decreases compared to the original budget proposal.
A significant reduction of R$300 million will occur in the Ministry of Agriculture’s allocation, decreasing from R$527.8 million aimed at balancing agricultural product prices, with the redirected funds flowing to CONAB. The government anticipates not needing the full support initially proposed for price stabilization.
The 2025 PLOA initially allocated R$189.9 million for CONAB’s federal procurement program, designed for purchasing crops at lower market prices. This increase will enable CONAB to procure an estimated 445,000 tonnes of grains, including key staples like rice, beans, and corn, compared to the previous calculation of nearly 230,000 tonnes.
In addition to CONAB, EMBRAPA is set for a budget increase for research and development, nearly doubling its initial allocation from R$137.4 million to R$285.4 million with the added R$148 million. Although this is an improvement, it still falls significantly below EMBRAPA’s request of R$500 million for ongoing and new research projects.
EMBRAPA has stated it needs at least R$320 million to keep current projects running and support new proposals while maintaining its facilities. The Planning Ministry is also proposing an extra R$20 million for EMBRAPA’s infrastructure enhancement, raising the total allocation for this purpose to R$200.6 million.
Another significant budget proposal includes a R$400 million increase for the Ministry of Social Development and Assistance (MDS), designated for purchasing food from local farmers as part of initiatives like the Food Acquisition Program (PAA). This would elevate the overall food procurement budget to R$1.1 billion, with the distribution managed primarily by CONAB and municipalities in coordination with MDS.
The proposed budget for 2025 reflects targeted increases for both CONAB and EMBRAPA to address food supply and agricultural research needs. While CONAB receives R$300 million for grain reserves and EMBRAPA gains R$148 million for research, concerns remain regarding adequate funding for rural credit subsidies and insurance. The adjustments demonstrate a shift in governmental priorities towards enhancing food security and supporting agricultural innovation, despite not fully meeting all requests from these agencies.
Original Source: valorinternational.globo.com
