7 Peculiarities of Rural Credit in the Cerrado: Private resources attracted to finance large producers contrast with scarcity of credit for family farming

The report examines rural credit in the Cerrado, noting that while the biome accounts for about one-third of Brazil's rural credit and agricultural production, financing is highly concentrated among large producers and public banks. It highlights a growing reliance on private funding sources like Agricultural Credit Notes (LCA) and a significant scarcity of credit for family farming through programs like PRONAF. The authors argue that improving credit access for smaller producers is essential for increasing productivity and reducing deforestation pressures.

• Rural credit in the Cerrado is proportional to its agricultural output, with the biome accounting for approximately one-third of both Brazil's total rural credit and agricultural production. However, this credit is highly concentrated; in the 2019/20 agricultural year, the average contract value in the Cerrado was R$ 224,000, which is 181% higher than the average for other biomes.
• Credit access is heavily skewed toward large-scale producers, with 76% of the total credit amount in the 2019/20 agricultural year not tied to any specific program. In contrast, the National Program for Family Farming (PRONAF) only accounted for 4% of the rural credit volume in the biome, significantly lower than the 22% share it holds in the rest of Brazil.
• The Cerrado has seen a significant shift toward private funding sources. Agricultural Credit Notes (LCA) and Rural Savings – Unrestricted increased to 19% and 15% of the total credit amount in 2019/20, respectively, having both been close to zero in 2002/03. This indicates the Cerrado attracts more private resources for agriculture than other Brazilian regions.
• Public banks dominate the distribution of rural credit in the region, resulting in low market competition. Banco do Brasil was the main credit provider in 72% of the biome's municipalities and responsible for 50% of the total credit volume in 2019/20. Banco do Nordeste was the largest lender in 19% of municipalities, accounting for 5% of the volume.
• Agricultural production in the Cerrado is dominated by soy, which accounted for 43% of the total crop value in the biome in 2019 (R$ 63 billion). There is also a notable trend in corn production, where the second crop (safrinha) grew from 37% of total production in 2003 to 82% in 2019, totaling 41 million tons.
• There is significant geographic heterogeneity in credit intensity. In 2018, the ratio between rural credit and the Gross Value Added of agriculture was high in São Paulo (0.98), Tocantins (0.88), and Goiás (0.85), but much lower in Maranhão (0.49), Piauí (0.48), and Bahia (0.42).

APA

Climate Policy Initiative (2021). 7 Peculiarities of Rural Credit in the Cerrado: Private resources attracted to finance large producers contrast with scarcity of credit for family farming. https://www.climatepolicyinitiative.org/publication/7-peculiarities-of-rural-credit-in-the-cerrado-private-resources-attracted-to-finance-large-producers-contrast-with-scarcity-of-credit-for-family-farming/

Chicago

Climate Policy Initiative. 7 Peculiarities of Rural Credit in the Cerrado: Private resources attracted to finance large producers contrast with scarcity of credit for family farming. 2021. https://www.climatepolicyinitiative.org/publication/7-peculiarities-of-rural-credit-in-the-cerrado-private-resources-attracted-to-finance-large-producers-contrast-with-scarcity-of-credit-for-family-farming/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=7 Peculiarities of Rural Credit in the Cerrado: Private resources attracted to finance large producers contrast with scarcity of credit for family farming |date=9 August 2021 |url=https://www.climatepolicyinitiative.org/publication/7-peculiarities-of-rural-credit-in-the-cerrado-private-resources-attracted-to-finance-large-producers-contrast-with-scarcity-of-credit-for-family-farming/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021peculiarities, author = {{Climate Policy Initiative}}, title = {{7 Peculiarities of Rural Credit in the Cerrado: Private resources attracted to finance large producers contrast with scarcity of credit for family farming}}, institution = {Climate Policy Initiative}, year = {2021}, month = aug, url = {https://www.climatepolicyinitiative.org/publication/7-peculiarities-of-rural-credit-in-the-cerrado-private-resources-attracted-to-finance-large-producers-contrast-with-scarcity-of-credit-for-family-farming/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }