Brazil’s Proposed 2025 Budget Includes Increased Funding for CONAB and EMBRAPA

Brazil’s 2025 budget proposes R$300 million for CONAB and R$148 million for EMBRAPA to improve food reserves and agricultural research, respectively. However, these amounts do not meet the initial funding requests made by these agencies. The budget submission also reflects reductions in agricultural subsidies, raising concerns over sufficient support for rural credit and insurance.

In the proposed 2025 budget, Brazil’s Companhia Nacional de Abastecimento (CONAB) is earmarked to receive an additional R$300 million to enhance its regulatory grain reserves, which is crucial in combating food inflation. Concurrently, the Empresa Brasileira de Pesquisa Agropecuária (EMBRAPA) will gain an increase of R$148 million for its research endeavors, although these increments do not fulfill the original requests of the respective agencies.

The Ministry of Planning and Budget presented the budget adjustments to the Joint Budget Committee (CMO) of the National Congress, looking to amend the 2025 Annual Budget Bill (PLOA). A vote on these proposals is anticipated next week, with the potential for further modifications prior to final approval. Despite discussions about financial constraints, no additional allocations for subsidizing rural credit interest rates or for rural insurance have been proposed.

The approved budget for rural insurance stands at R$1.06 billion for 2025, yet much of it is already allocated to cover policies from 2024 impacted by budget cuts. The current funding constraints affect approximately 10,000 contracts between farmers and insurers amounting to R$67 million in subsidies. Minister Simone Tebet emphasized that the adjustments reflect necessary reallocations due to evolving priorities.

The Ministry of Agriculture will face a R$300 million reduction in its economic subsidy allocation aimed at stabilizing agricultural prices, with funds redirected to support CONAB. As per current trends in commodity prices, the government believes reduced funding is sufficient for 2025. This shift follows President Lula’s directive to enhance food reserves, even though CONAB had requested additional funds of R$350 million.

The initial allocation for CONAB’s purchasing program was R$189.9 million, which allowed for acquiring approximately 230,000 tonnes of crops, focusing predominantly on rice, beans, and corn. With the extra allocation, CONAB anticipates procuring around 445,000 tonnes. The Ministry of Planning also suggested reducing the Ministry of Agriculture’s subsidy for the AGF program.

EMBRAPA is set to benefit from an increase in its budget for research and development, rising from R$137.4 million to a proposed total of R$285.4 million. Notably, EMBRAPA’s request was for R$500 million, reinforcing the gap between needs and allocations. EMBRAPA has indicated a requirement of at least R$320 million to sustain ongoing projects and approve new proposals while maintaining its facilities.

Additionally, the Planning Ministry has requested R$20 million for the improvement of EMBRAPA’s infrastructure. Another significant budget proposal is a R$400 million increase for the Ministry of Social Development and Assistance (MDS) to support food procurement from small farmers. This effort aims to augment the total food procurement budget to R$1.1 billion, with a notable portion being managed by CONAB.

In summary, the proposed 2025 budget in Brazil allocates increased funds to CONAB and EMBRAPA aimed at bolstering food reserves and agricultural research. However, these increased amounts do not meet the initial requests from the agencies. The government’s emphasis on reallocating budget funds reflects changing priorities while remaining cautious of sufficient financial support for rural development initiatives and agricultural stability. The overall adjustments could play a pivotal role in addressing food inflation and enhancing support for farmers throughout Brazil.

Original Source: valorinternational.globo.com