Cattle and soy capture 47% of family farming funds over three decades

These commodities have received a combined R$ 240.5 billion since the program’s inception. Created to support family farming, Pronaf needs to return to its core principles to address long-standing distortions.

The National Program for Strengthening Family Farming (Pronaf) celebrates its 31st anniversary in 2026. Significant changes have occurred since its launch: interest rates have decreased while the volume of resources has increased year after year, reaching a record R$ 78.2 billion for the 2025–26 crop season. Interest rates, which stood at 16% per year in 1995, now range from 0.5% to 8%. 

The program’s target audience has expanded, creating exclusive credit lines for women, young people, and specific types of production, such as agroecological farming. The evolution of the program’s scope and the distribution of resources among Brazil’s regions is undeniable, but it remains insufficient unless combined with other public policies, according to experts interviewed by Joio.

At the same time, minimal progress has been made: since its inception, more than half of Pronaf’s resources have supported commodity production. In the first crop calendar (1995–96), 67.8% of operating credit went to tobacco, corn, and soybeans. 

Tobacco lost ground starting in 2001, when the Central Bank prohibited the granting of credit for that crop. However, the other commodities remain dominant to date. 

In 2025, 69.6% of agricultural operating credit went to soybean, corn, and coffee crops, the country’s main raw commodities. Meanwhile, financing for cattle began to account for more than 50% of livestock operating credit during Lula’s first administration. Last year, financing reached R$ 15.5 billion, or 92.8% of all livestock operating credit.

Over 30 years of Pronaf, cattle farming and soybean fields absorbed 47% of the program’s resources, equivalent to R$ 240.5 billion. The survey was conducted by Joio based on microdata available on the Central Bank (Bacen) website in February 2026. The information considers loans from livestock operating credit lines in all categories and agricultural operating credit only in the crop-farming category.

Financing for crops was measured only by the value of crop operating credit, as this category allows for a more direct comparison. “The benefits soybeans receive from Pronaf extend across different credit lines, categories, and purposes. Many farmers use Pronaf loans to buy tractors, for example. If they produce soybeans, obviously the tractor will be used for soybeans, but the Pronaf database does not connect the tractor to soybeans. It will appear under machinery, infrastructure, in the ‘tractors’ subcategory,” notes Valdemar Wesz Jr., professor at Universidade Federal da Integração Latino-Americana (Unila). He researches the National Rural Credit System (SNCR) and family farming. 

The prominence of cattle financing, in turn, may be linked to domestic supply. “Milk is destined for the domestic market, and there are several government initiatives seeking to ensure supply, including purchases in some regions aimed at lowering prices. Regardless of preference, we are a country that consumes a lot of beef, so part of this production does go abroad, but it also helps keep prices lower domestically,” argues Adinor Capellesso, an agronomist, professor of Agroecological Crop Production at Instituto Federal de Santa Catarina (IFSC), who studied rural credit and insurance during his doctoral research.

Pronaf has always represented a small portion of rural credit – when comparing yearly figures, it represents only a fraction (one-fourth to one-sixth). Adding up and adjusting Pronaf financing amounts over 30 years results in R$ 561 billion, a figure very close to the R$ 516 billion announced for the commercial agriculture Crop Plan in 2025. 

In partnership with Valdemar Wesz Jr., professor at Universidade Federal da Integração Latino-Americana (Unila), who researches the National Rural Credit System (SNCR) and family farming, Capellesso published a paper in 2021 on rural credit in Brazil. They found that Pronaf expanded access to credit between 2003 and 2014, but that it is still insufficient to include the poorest farmers. In addition, the results pointed to a process that prioritizes integrated production systems, such as agricultural commodities, especially in the South region. 

That same year, Wesz Jr. published the paper O Pronaf pós-2014: intensificando a sua seletividade? (Pronaf after 2014: intensifying its selectivity?) and found that between 2014 and 2018 – a period during which several public policies aimed at family farming were dismantled – Pronaf was among the least affected. Even with a 24.4% reduction in the announced budget, access for more capitalized farmers and commodity producers was not affected. “In times of crisis, the tendency is for concentration around the same profile, those considered safer by banks,” the author explains. 

Geographic and Financial Concentration

Academic articles and technical studies published over different decades have identified the same trend toward concentration and point to the lack of complementary public policies as a determining factor behind it. Public technical assistance and rural extension services (Ater), institutional procurement programs – such as the Food Acquisition Program (PAA) and the National School Feeding Program (Pnae) – as well as public stockpiles and participation in fairs and markets are some examples. 

The recently published paper Quem fica de fora do Pronaf? (Who Is Left Out of Pronaf?) by the Climate Policy Initiative, a public policy research center affiliated with Pontifícia Universidade Católica do Rio de Janeiro (PUC-RJ), showed that municipalities in the South access, on average, five times more Pronaf resources than those in the North, and that there is a direct relationship between access to credit, technical assistance, and cooperativism: “Technical assistance and membership in cooperatives help fill information access gaps, as they disseminate information and practices that family farmers can use to increase production and access credit more easily,” the paper states. 

In a simulation, the authors estimated that the North would increase its credit uptake by 53.8% if farmers had the same access to technical assistance as those in the South, and by 38.5% if it had the same level of cooperativism. In other words, the lack of public policies related to technical assistance is a determining factor in understanding the credit system and in preparing a feasible financing project. 

At the same time, the Northern region shows diversity in production financed by Pronaf. A 2025 analysis by the Institute for Applied Economic Research (Ipea) showed that municipalities with a higher proportion of contracts under the agricultural operating credit category displayed lower production diversification, although the type of crop and the degree of concentration varied. 

Among the more diversified regions are the North, where cassava, açaí, and cocoa accounted for 52% of resources, and the Northeast, where corn, beans, and cassava totaled 47% – crops that are part of the local food culture, although cocoa is also a commodity. Meanwhile, in the Southeast, arabica coffee accounted for 57% of the total value, and in the South and Midwest, soybeans absorbed nearly half of all funding: 46% and 49%, respectively. Both soybeans and coffee – more recently in the latter case – are predominantly export products. 

One of the researchers’ hypotheses is that Pronaf itself is not necessarily a determining factor in encouraging monoculture, but rather that the design of the credit policy combined with local economic structures directs farmers toward commodities. “They will produce whatever already has an established market. If they produce pumpkins or watermelons without having buyers, they lose what they planted,” explains Regina Sambuichi, an Ipea researcher and coordinator in the area of rural development. 

This is a clear difference between a sack of soybeans and a pumpkin: while the former can be stored and even used as collateral for bank loans, the latter cannot be kept for long periods or pledged as security. However, a farmer who grows only soybeans cannot eat the grain itself, whereas one with diversified crops is unlikely to go without food on the table.

A farmer who saves seeds, uses self-produced inputs, and exchanges services with neighbors – or, in the case of traditional peoples and communities where collective work efforts and traditional land-management techniques are used – generally requires smaller loan amounts, making them less attractive to financial institutions. 

Access Bottlenecks

Over time, Pronaf has been expanded and modified to encompass different profiles of family farmers. Each year, the Rural Credit Manual (MCR) updates the profiles that qualify and the rules for access. However, the regulations do not require financial institutions to offer all Pronaf credit lines, nor do they establish a minimum amount or percentage to be allocated. 

The incentive comes from lower interest rates set by the government for certain activities. One example is the operating credit line for families earning up to R$ 250 thousand per year. Under this line, those who choose to produce foods listed in Tier I, such as rice, beans, cassava, and bananas, pay 3% annual interest, while a farmer within the same income bracket who grows soybeans, cotton, or raises beef cattle pays 8% per year. Even so, the incentive has not been enough to change the scenario: the share of resources allocated to soybeans has remained around 30% over the last four years.

To make it feasible for banks to provide lower-interest loans, the government subsidizes the interest rates. In practice, this means that if the bank’s cost of money is around 15% per year and the farmer accesses a credit line with a 3% annual interest rate, the public budget covers the remaining 12%. For the 2025–26 crop calendar, the government estimates that the subsidy will exceed R$ 8 billion. 

Different subprograms were created to expand the reach of the credit system beginning with Lula’s first administration (see box below), and interest rates and loan limits change frequently. In the 2025–26 crop calendar, there were 17 credit lines.

One of the credit lines banks are required to offer is aimed at agrarian reform settlers. Pronaf incorporated the Special Credit Program for Agrarian Reform (Procera) during the first administration of Fernando Henrique Cardoso, under the so-called Pronaf A category. During Lula’s second administration, the credit line was expanded to include quilombola communities and, later, Indigenous peoples. 

These groups have access to lower interest rates and discounts that can reach up to 40% of the debt if installments are paid on time. Loans under this line are guaranteed by the government. 

Small but Steady Steps

When analyzing the program’s history, the progress and importance of Pronaf are evident, but the goals set by the Ministry of Agrarian Development and Family Farming (MDA) for credit lines directly linked to food and nutritional security remain modest. According to the ministry’s 2023–27 Multi-Year Plan, the objective is to establish 322,700 contracts under Pronaf lines for food production operating credit, agroecology, and sociobiodiversity. This represents about one-fifth of the annual number of operations – for more than a decade, the number of Pronaf contracts has hovered around 1.5 million.

When comparing the historical performance of the Agroecology, Forest, and food production operating credit lines, it becomes clear that the target is nearly double what has been achieved annually since 2015. In a statement, the MDA responded without explaining how the target had been defined: “In recent crop seasons, the federal government has been expanding financing for food production in Brazil. Credit that was previously concentrated in commodities is undergoing changes through new incentivized credit lines for food production.” Joio submitted a series of questions to the Central Bank, the body responsible for updating the MCR, regarding Pronaf rules, but the institution had not responded by the time this report was published. 

The MDA is responsible for formulating the subsidized credit policy, but the rules governing operations are drafted by the National Monetary Council (CMN). Changes have already been made to the MCR to increase access to rural credit for farmers in the North and Northeast regions, which occurred in the 2023–24 crop calendar, when growth of 22% and 82%, respectively, was recorded. The absence of rules and targets within rural credit policy tends to expand banks’ discretionary power and reinforce credit concentration. 

In March, the Observatory of Sociobiodiversity Economies (ÓSocioBio) discussed and presented a technical note to several federal government agencies containing recommendations and suggestions for adjustments to the 2026–27 Crop Plan and the MCR in order to accommodate sociobiodiverse production systems, such as agroforestry, sustainable extractivism, and agroecological transition. The main recommendation is the expansion of the network authorized to issue official documentation for family farmers and the extension of the document’s validity period.

Also in March, the president enacted a law authorizing the use of uncommitted resources from the Operations Guarantee Fund as collateral for Pronaf loans, which would remove the requirement for many farmers to provide hard collateral, such as fully paid-off property. In practice, this could expand access to credit for lower-income farmers with fewer assets, as well as for traditional peoples and communities, who often produce collectively on shared lands. 

Structural Distortions

Subsidized credit is the State’s main instrument for promoting agricultural production in Brazil. Since its creation in 1965, the National Rural Credit System has been operated through the banking network and oriented toward productive projects aligned with the Green Revolution model: monoculture, mechanization, and intensive use of industrial inputs. Credit approval was conditioned on allocating at least 15% of the contracted amount to the purchase of agricultural inputs, such as seeds, fertilizers, and pesticides. 

This creates a self-reinforcing cycle: when financing encourages large-scale commodity production, other public policies tend to move in the same direction, such as agricultural research, rural extension services, and infrastructure for transporting production.

Fernando Henrique Cardoso’s first administration established Pronaf after years of struggle by peasant movements that pressured for the acceleration of agrarian reform and the creation of public policies such as technical assistance, rural insurance, and rural safety measures. Even so, the program was created within a banking framework, embedded in routines shaped by financial return criteria and beneficiaries’ repayment capacity. And within an ecosystem that reinforced this model. 

Pronaf was the first program to unify the various non-corporate rural experiences under a single term. Previously, these groups were referred to as small farmers, subsistence farmers, or low-income producers. Loans were virtually inaccessible to this segment, and impossible for those who did not own land. It was not uncommon for farmers to lose their limited assets to banks.

In 1996, family farmers accounted for 85% of rural establishments and occupied 30% of Brazil’s agricultural land, and they represented a severely undercapitalized sector. State assistance was needed to initiate production, improve working conditions, and increase productivity. Subsidized credit was the solution adopted to raise rural incomes and contain rural exodus, which had been intense during the previous two decades.

Although organizations such as the National Confederation of Rural Workers and Family Farmers (Contag) participated in its drafting and discussions with the MDA, Pronaf was created within a financial system that serves agricultural exports, with financial rules defined by the CMN and operations carried out by banks. 

Throughout Pronaf’s three decades of existence, the amount released to family farmers has always represented a smaller share of the National Rural Credit System, even though this segment remains the largest to this day: according to the 2017 Agricultural Census, 76% of rural establishments are family-run, occupying 23% of agricultural land and employing 75% of the rural workforce.  

Even with lower interest rates, discounts, and grace periods, access to credit still carries a symbolic burden for some family farmers. In many communities, indebtedness is associated with the risk of public exposure and loss of social standing. “‘What if I couldn’t pay and they mentioned my name on the radio?’” Wesz Jr. recalls, citing the account of a female farmer interviewed during his research. Her fear was hearing on the local radio station that “Banco do Brasil is calling So-and-So regarding matters of interest.” “Everyone knew it meant debt.”