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

This policy brief by the Climate Policy Initiative analyzes the rural credit market in the Brazilian Cerrado biome, highlighting a concentration of financial flows toward large-scale producers and soy production, while noting a scarcity of credit for small and medium-sized family farmers.

• The Cerrado biome's rural credit volume is proportional to its agricultural output, with both accounting for approximately one third of the Brazilian national totals. Credit is heavily concentrated in crop production, which received 68% of total contract amounts in the 2019/20 agricultural year, with soy specifically accounting for 38% of the R$ 50 billion loaned for crops in the biome.
• Rural credit in the Cerrado is more concentrated than in other Brazilian biomes, characterized by significantly higher average contract values. 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.
• There is a marked scarcity of credit for small and medium-sized producers in the Cerrado compared to the rest of Brazil. In 2019/20, the National Program for Family Farming (PRONAF) accounted for only 4% of the rural credit volume in the biome, and the National Program to Support Medium-Sized Farmers (PRONAMP) accounted for 13%, whereas these programs represented 22% and 16% of credit volume respectively in the rest of the country.
• The Cerrado has attracted a higher proportion of private financing resources than other regions of Brazil. Agricultural Credit Notes (LCA) and Rural Savings – Unrestricted grew to represent 19% and 15% of the total credit amount in the 2019/20 agricultural year, respectively, while Compulsory Resources and Rural Savings – Restricted declined to 25% and 13%.
• Public banks dominate the distribution of rural credit in the Cerrado, resulting in low market competition. Banco do Brasil was the primary credit provider in 72% of the biome's municipalities and provided 50% of the total credit volume in 2019/20. Banco do Nordeste was the largest lender in 19% of municipalities, contributing 5% of the volume.
• Agricultural production in the Cerrado has shifted toward a pattern of soy as the primary crop and corn as the second crop (safrinha). In 2019, the second corn harvest accounted for 82% of the total corn produced in the biome, totaling 41 million tons, compared to 9 million tons from the first harvest.
• Credit intensity varies significantly across the Cerrado's geography. In 2018, the ratio between rural credit and the Gross Value Added of agriculture was highest in São Paulo (0.98), Tocantins (0.88), and Goiás (0.85), and lowest 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} }