Introduction
Agriculture is one of the main economic activities in the field, being considered one of the branches that most promotes the economy of Brazil and the world. In order for this activity to develop to its full potential, a series of factors is necessary that, together, make this gear run. One of them is credit, especially Rural Credit.
Seeds, fertilizers, pesticides and machinery are fundamental requirements for starting a fully productive chain to supply part of the world population. As a result, many rural producers, seeking business growth, seek credit from financial institutions.
In this article we will explain to you how the credit lines that promote the agribusiness chain work.
What is Rural Credit?
Rural Credit is the credit line offered by financial institutions to rural producers, cooperatives and producer associations with the objective of defraying the harvest of rural producers, expanding production, processing, marketing and distribution. This credit line can be subsidized by the government or privately.
One of the main differences from government-subsidized rural credit to private rural credit is through fundraising. While government subsidized credit has resources controlled by the Federal Government, as well as receiving subsidies through equalized interest for certain products. Private rural credit, on the other hand, raises its own funds.
What are the types of Rural Credit?
Rural credit is divided into three types:
Credit for costing
Investment credit
Credit for commercialization.
The credit for payment is used in order to settle production costs, such as seeds, inputs and pesticides.
Investment credit is used when the rural producer purchases durable goods, such as planting equipment and machinery.
Finally, the credit for commercialization aims to finance not the cost of the production itself, but the sale of it. An example of this is the anticipation of sales of products that have not yet been delivered, as well as the construction of production storage improvements.
What are the benefits of Rural Credit?
Rural credit has real benefits for producers. One of the great attractions for the adherence of this modality is the reduced rates, compared to others offered in the market, and the payment term, being, in most cases, the harvest term or long-term maturities for products such as investment credit.
The resources allocated to Rural Credit are defined by the Safra Plan, a State program that defines the amount that should be allocated to agricultural activities in the country. Part of these funds is used to subsidize interest rates, which are not the same as those practiced by the market in general.
However, it is not only through Rural Credit that rural producers can access resources. Hiring private loans or financing via financial market institutions for agribusiness brings many other benefits, such as less bureaucracy and greater flexibility in terms of terms and guarantees, in addition to the perspective of personalized interest.
The contracting process must undergo credit analysis using parameters and requirements defined by the financial institution.
Who can apply for Rural Credit?
Rural, private or public credit, individuals or legal entities that have mechanisms for proving agricultural activity, can apply for credit. Be it agriculture, livestock, beef cattle, dairy farming, among others.
What does it take to get rural credit?
Each financial institution has its kit of documents that are requested when contracting rural credit. Personal supporting documents such as identity, CPF or CNPJ, proof of address and documents related to the agricultural activity carried out, such as:
Copy of the property registration number.
Territorial tax.
Rural property registration certificate.
Granting of water (for activities involving irrigation)
Environmental statement (in some states)
Producer's Declaration of Aptitude (for small producers)
CAR - Rural Environmental Registry
We are a family owned and operated business.
Conclusion
The credit lines focused on rural producers help and bring numerous benefits for the expansion of operations, where financial institutions together with rural producers achieve their common objective: the promotion of agriculture in Brazil.
