6 Peculiarities of Rural Credit in the Amazon: New Research Shows Credit Restrictions and Extensive Land Use in Agriculture

This policy brief by the Climate Policy Initiative analyzes the specific characteristics of rural credit in the Brazilian Amazon biome, highlighting a heavy reliance on cattle production, limited access to credit compared to other Brazilian regions, and a lack of competition among financial institutions. The analysis suggests that these financial structures contribute to extensive land use and deforestation, advocating for a credit system better aligned with the Forest Code and sustainability indicators.

• Rural credit in the Amazon is heavily concentrated in cattle farming, which is closely linked to deforestation. In the 2019/20 agricultural year, 57% of the credit amount in the Amazon biome was for cattle production, compared to 32% in the rest of Brazil. Additionally, 81% of the number of contracts in the region were related to cattle farming.
• Producers in the Amazon face more stringent credit restrictions than those in other parts of Brazil. While the Amazon contained 13% of all Brazilian rural producers in 2017, the value of rural credit operations in the biome's municipalities represented only 7.2% of total rural credit in Brazil during the 2016/17 agricultural year.
• Agricultural activities in the Amazon are significantly less business-oriented than in the rest of the country. In the 2019/20 agricultural year, credit borrowed by companies in the biome accounted for only 4.8% of the region's total, whereas companies elsewhere in Brazil accounted for 26% of the credit volume.
• The rural credit market in the Amazon is characterized by low competition and a dominance of public banks. Banco do Brasil and Banco da Amazônia were the primary credit sources for 78% of municipalities in the region during the 2019/20 agricultural year.
• Funding sources for rural credit in the Amazon have shifted over time. The Northern Constitutional Fund (FNO), which provided 49% of rural credit in the 2000/01 agricultural year, fell to 17% by 2019/20. Meanwhile, private investments via Agriculture Credit Notes (LCA) grew from 0.1% in 2014/15 to 12% in 2019/20.
• The National Program for Family Farming (PRONAF) is more relevant in the Amazon than the National Program to Support Medium-Sized Rural Producers (PRONAMP). In 2019/20, PRONAF operations accounted for 17% of total credit volume in the Amazon, while PRONAMP accounted for 10%. This is partly because larger properties in the Amazon can still qualify for PRONAF due to the larger size of fiscal modules in the Northern region.

APA

Climate Policy Initiative (2021). 6 Peculiarities of Rural Credit in the Amazon: New Research Shows Credit Restrictions and Extensive Land Use in Agriculture. https://www.climatepolicyinitiative.org/publication/6-peculiarities-of-rural-credit-in-the-amazon-new-research-shows-credit-restrictions-and-extensive-land-use-in-agriculture/

Chicago

Climate Policy Initiative. 6 Peculiarities of Rural Credit in the Amazon: New Research Shows Credit Restrictions and Extensive Land Use in Agriculture. 2021. https://www.climatepolicyinitiative.org/publication/6-peculiarities-of-rural-credit-in-the-amazon-new-research-shows-credit-restrictions-and-extensive-land-use-in-agriculture/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=6 Peculiarities of Rural Credit in the Amazon: New Research Shows Credit Restrictions and Extensive Land Use in Agriculture |date=3 May 2021 |url=https://www.climatepolicyinitiative.org/publication/6-peculiarities-of-rural-credit-in-the-amazon-new-research-shows-credit-restrictions-and-extensive-land-use-in-agriculture/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021peculiarities, author = {{Climate Policy Initiative}}, title = {{6 Peculiarities of Rural Credit in the Amazon: New Research Shows Credit Restrictions and Extensive Land Use in Agriculture}}, institution = {Climate Policy Initiative}, year = {2021}, month = may, url = {https://www.climatepolicyinitiative.org/publication/6-peculiarities-of-rural-credit-in-the-amazon-new-research-shows-credit-restrictions-and-extensive-land-use-in-agriculture/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }