7 Peculiarities of Rural Credit in the Cerrado

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

• The Cerrado biome's rural credit volume is proportional to its agricultural output, accounting for approximately one third of both the country's rural credit and agricultural production. 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 was R$ 224,000, which is 181% higher than the average for other biomes. This is linked to the biome's larger average agricultural establishment size; in 2017, the average area was 154 hectares compared to 54 hectares in other biomes.
• There is significant regional heterogeneity in credit intensity across the Cerrado. The central region, comprising Goiás, Mato Grosso, and Tocantins, makes more intensive use of credit. 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), while it was notably lower in Maranhão (0.49), Piauí (0.48), and Bahia (0.42).
• The rural credit market in the Cerrado is dominated by public banks, resulting in low competition. In the 2019/20 agricultural year, Banco do Brasil was the primary credit provider in 72% of the biome's municipalities and provided 50% of the total credit volume. Banco do Nordeste was the largest lender in 19% of municipalities, accounting for 5% of the volume, while the private bank Bradesco was the largest lender in only 1% of municipalities.
• The Cerrado has attracted a higher proportion of private funding sources for agriculture compared to the rest of Brazil. Agricultural Credit Notes (LCA) and Rural Savings - Unrestricted grew to represent 19% and 15% of the total credit amount in 2019/20, respectively. Conversely, subsidized sources like Compulsory Resources and Rural Savings - Restricted have declined, accounting for 25% and 13% of the total credit amount in 2019/20.
• Credit for small and medium-sized producers is scarce in the Cerrado. In 2019/20, the National Program for Family Farming (PRONAF) accounted for only 4% of the rural credit volume, and the National Program to Support Medium-Sized Farmers (PRONAMP) accounted for 13%. In contrast, across the rest of Brazil, PRONAF and PRONAMP represented 22% and 16% of the credit volume, respectively. Consequently, 76% of the total credit amount in the Cerrado in 2019/20 was not associated with any specific program.
• The National Program for Low-Carbon Emissions in Agriculture (ABC Program) has seen significant growth in the Cerrado, increasing from R$ 19 million in 2010/11 to R$ 1 billion in 2019/20, representing 1.5% of the total amount borrowed in that year.

APA

Souza, P., Intropidi, B., de Campos, G., Vogt, P., & Assunção, J. (2021). 7 Peculiarities of Rural Credit in the Cerrado. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/08/7-Peculiarities-of-Rural-Credit-in-the-Cerrado.pdf

Chicago

Souza, Priscila, Barbara Intropidi, Gabriel de Campos, Pedro Vogt, and Juliano Assunção. 7 Peculiarities of Rural Credit in the Cerrado. Climate Policy Initiative, 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/08/7-Peculiarities-of-Rural-Credit-in-the-Cerrado.pdf.

Wikipedia

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BibTeX

@techreport{souza2021peculiarities, author = {Souza, Priscila and Intropidi, Barbara and de Campos, Gabriel and Vogt, Pedro and Assunção, Juliano}, title = {{7 Peculiarities of Rural Credit in the Cerrado}}, institution = {Climate Policy Initiative}, year = {2021}, month = aug, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2021/08/7-Peculiarities-of-Rural-Credit-in-the-Cerrado.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }