THE IMPACT OF RURAL CREDIT ON BRAZILIAN AGRICULTURE AND THE ENVIRONMENT

The document argues that rural credit is a central agricultural policy in Brazil that significantly boosts productivity and supports environmental conservation by shifting land use from pastures to croplands, thereby increasing forest areas. It highlights that a 1% increase in rural credit leads to measurable gains in municipal crop production, agricultural GDP, and cropland productivity. However, the brief notes that the current distribution system is complex and fragmented, creating inconsistencies in credit access. It recommends using rural credit to reconcile production and conservation goals and suggests that any policy reforms be introduced gradually to avoid disrupting agricultural output.

• Rural credit is the central agricultural policy in Brazil, accounting for approximately 40% of total agricultural production, which was roughly R$225 billion (US$61 billion) in the 2018-2019 agricultural year.
• A 1% increase in rural credit lending results in specific economic gains: a 0.29% increase in municipal crop production, a 0.17% increase in agricultural GDP, a 0.05% increase in total municipal GDP, a 0.21% increase in cropland productivity, and a 0.22% increase in rural worker crop productivity.
• Increased rural credit supply positively impacts land use by shifting production from pastures to croplands and increasing forest areas; specifically, a 1% increase in credit correlates with a 0.08% increase in crop area, a 0.11% decrease in pasture, and a 0.02% increase in forest areas.
• The Brazilian rural credit system is governed by two primary plans: the Agricultural Plan (PAP) for medium and large producers, and the National Plan for Family Farming (PRONAF) for small producers. In 2018-2019, PAP included R$194 billion (US$52 billion) and PRONAF included R$31 billion (US$8.4 billion).
• The current rural credit distribution system is described as outdated, fragmented, and highly complex, which distorts credit access and creates uncertainty for producers based on the geographic location of bank branches and cooperatives.

APA

Assunção, J., & Souza, P. (2019). THE IMPACT OF RURAL CREDIT ON BRAZILIAN AGRICULTURE AND THE ENVIRONMENT. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/04/PB-Impact-Rural-Credit-Brazilian-Agriculture-EN-17Abr.pdf

Chicago

Assunção, Juliano, and Priscila Souza. THE IMPACT OF RURAL CREDIT ON BRAZILIAN AGRICULTURE AND THE ENVIRONMENT. Climate Policy Initiative, 2019. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/04/PB-Impact-Rural-Credit-Brazilian-Agriculture-EN-17Abr.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Souza |first2=Priscila |title=THE IMPACT OF RURAL CREDIT ON BRAZILIAN AGRICULTURE AND THE ENVIRONMENT |publisher=Climate Policy Initiative |date=March 2019 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2019/04/PB-Impact-Rural-Credit-Brazilian-Agriculture-EN-17Abr.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2019impact, author = {Assunção, Juliano and Souza, Priscila}, title = {{THE IMPACT OF RURAL CREDIT ON BRAZILIAN AGRICULTURE AND THE ENVIRONMENT}}, institution = {Climate Policy Initiative}, year = {2019}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2019/04/PB-Impact-Rural-Credit-Brazilian-Agriculture-EN-17Abr.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }