Banco do Brasil accuses large farmers of refusing to pay debts

This is a translation of the original article in Portuguese. Read the original (Português).

Tarciana Medeiros, president of Banco do Brasil, the Brazilian state-controlled bank, said on Thursday (12) that some large and medium-sized rural producers refused to pay, renegotiate or offer collateral for their debts with the bank. The statement was made while releasing third-quarter results, according to the Brazilian newspaper Correio da Manhã.

Rural lobby groups reacted to the accusation. The reaction comes at a time when defaults in agribusiness are weighing on the accounts of the country’s largest rural lender. The bank’s results showed a 66.5% drop in profit, and that is the backdrop to the president’s remarks.

A day earlier, on Wednesday (11), the Senate approved Provisional Measure 1.376/2026, which expands the options for renegotiating debts of producers hit by climate events. The text covers those who suffered climate-related losses, not all debtors in the sector.

The dispute exposes two sides. On one hand, the bank says there are borrowers able to pay who neither negotiate nor offer guarantees. On the other, the rural sector is pushing back against that reading, at a time when Congress is opening more room to renegotiate debts linked to climate problems.

What changes for those who take out rural credit will depend largely on how defaults are handled going forward. Rising non-payment could make farm financing more expensive, since banks tend to adjust interest rates and collateral requirements when risk grows. It could also put pressure on the Treasury if the government is called upon to cover part of the renegotiation costs.

The practical rules for applying the renegotiation provided for in the measure, and the agencies responsible for putting it into effect, have yet to spell out the procedures. Until then, producers who meet the climate-loss criteria are waiting for final conditions before negotiating their debts.

Reporting from Correio da Manhã (p. 7, caderno nacional: Banco do Brasil acusa produtores rurais de não pagar dívidas).