Credit for investments in Brazilian agriculture and the role of the Brazilian Development Bank

This research paper analyzes the role of the Brazilian Development Bank (BNDES) in financing agricultural investments in Brazil. It finds that BNDES credit has grown significantly since 1995, primarily supporting crop activities (especially soy) and the acquisition of tractors and harvesting equipment. The credit is heavily concentrated in the Midwestern region and is predominantly operated by private financial agents, such as banks owned by machine manufacturers, which contrasts with the broader Brazilian rural credit market dominated by public banks.

• BNDES is a primary provider of agricultural investment credit in Brazil, with its disbursements to the rural sector nearly quadrupling in real terms between 1995 and 2020. In 2020, BNDES disbursements for agricultural loans totaled R$ 17 billion, representing approximately 26% of the bank's total disbursements for that year.
• BNDES credit for agriculture is heavily skewed toward crop activities over cattle production. Between the 2002/03 and 2019/20 agricultural years, the bank's share of rural investment credit averaged 52% for crops compared to 16% for cattle. Soy has become the dominant agricultural product for equipment financing, increasing its share of rural credit for equipment from approximately 30% in 2008 to 61% in 2018.
• The majority of BNDES rural credit is focused on the acquisition of machinery, specifically harvesting equipment (32%) and tractors (28%), which represented the largest portions of credit volume in 2018. The MODERFROTA program, created in 2000 to address low mechanization, was the most significant program in 2020, accounting for 44.6% of the total amount.
• Geographically, BNDES equipment credit has shifted toward the Midwestern region, which became the region with the highest financing volume as of 2015, reaching 36% of all rural credit for equipment in 2018. This represents a 10 percentage point increase between 2005 and 2018, while the Southern and Southeastern regions declined to 26% and 25% respectively.
• BNDES rural credit is predominantly operated through an indirect modality (99% of the volume in 2020), where funds are transferred to financial agents. Unlike general rural credit in Brazil, which is dominated by public banks (56% in 2018), BNDES equipment credit is primarily operated by private agents. In 2018, banks owned by machine manufacturers accounted for 55% and private commercial banks accounted for 35% of the total loaned.
• BNDES utilizes various funding sources, with the Workers’ Assistance Fund (FAT) and the National Treasury being the most significant, accounting for 43% and 26% of the bank’s funds as of December 31, 2020.

APA

Climate Policy Initiative (2021). Credit for investments in Brazilian agriculture and the role of the Brazilian Development Bank. https://www.climatepolicyinitiative.org/publication/credit-for-investments-in-brazilian-agriculture-and-the-role-of-the-brazilian-development-bank/

Chicago

Climate Policy Initiative. Credit for investments in Brazilian agriculture and the role of the Brazilian Development Bank. 2021. https://www.climatepolicyinitiative.org/publication/credit-for-investments-in-brazilian-agriculture-and-the-role-of-the-brazilian-development-bank/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Credit for investments in Brazilian agriculture and the role of the Brazilian Development Bank |date=9 December 2021 |url=https://www.climatepolicyinitiative.org/publication/credit-for-investments-in-brazilian-agriculture-and-the-role-of-the-brazilian-development-bank/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021credit, author = {{Climate Policy Initiative}}, title = {{Credit for investments in Brazilian agriculture and the role of the Brazilian Development Bank}}, institution = {Climate Policy Initiative}, year = {2021}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/credit-for-investments-in-brazilian-agriculture-and-the-role-of-the-brazilian-development-bank/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }