Rural Debt Relief Measure Faces Wednesday Deadline as Congress Vote Looms

Brazil's federal government issued Provisional Measure 1,376/2026 in July 2026 to help agricultural producers and cooperatives renegotiate debts caused by adverse weather events or falling market prices. The measure authorizes special credit lines to pay off or reduce rural debts and allows the federal government to participate in a credit guarantee fund for rural lending operations.

The measure covers rural credit operations and certain Rural Product Notes, instruments producers use to obtain financing or anticipate resources. Under its rules, an old debt can be liquidated or amortized using funds from a new financing arrangement, replacing difficult payment obligations with terms better suited to the producer's capacity.

The credit guarantee fund authorizes the federal government to cover risks on contracted rural credit operations, providing additional security to lending institutions. Eligible beneficiaries include rural producers and agro-industrial cooperatives that meet specific criteria and hold debts covered by the measure.

General rules require beneficiaries to prove losses in at least two harvests between 2019 and 2025, with a minimum 30 percent reduction in expected gross income from the harvest or financed activity. Losses must be linked to adverse climate events or market price declines.

The joint congressional committee analyzing the measure approved deputy Paulo Pimenta's fourth report version on Tuesday, November 10, following negotiations with Senator Tereza Cristina that resolved disputes over the proposal's content and economic impact. The report received support from all committee members except deputy Afonso Hamm, who considered the measure insufficient to address sector problems.

The text now proceeds to the plenary of the Chamber of Deputies and then to the Federal Senate. Both chambers must conclude voting by Wednesday, November 11, when the measure's validity period expires. If Congress does not approve it by then, the measure loses validity and the continuity of its mechanisms is at risk.

The Parliamentary Agricultural Front advocates expanding the reference date for classifying delinquent operations from August 31 to October 31, 2026, and allowing collective technical reports to prove producer losses. Front president Pedro Lupion warned there is no guarantee the approved text will be fully preserved in presidential sanction, while FPA lawmakers also push for separate approval of Bill 5,122/2023 on rural credit debt settlement and discounts.