Agricultural Policy Monitoring and Evaluation 2026

5. Brazil

Main findings

Support to agriculture

Levels of support and protection are relatively low in Brazil. The Producer Support Estimate (PSE) fell from 7.6% of gross farm receipts in 2000-02 to 2.6% in 2023-25, well below the average for the 56 countries covered in this report (12.8%). Domestic producer prices are closely aligned with international markets, as reflected in a Nominal Protection Coefficient (NPC) of 1.01. While overall Market Price Support (MPS) remains limited, it still accounts for more than two‑thirds of total producer support, with the highest positive Single Commodity Transfers concentrated in cotton, rice, pig meat and wheat.

Budgetary support to producers is primarily delivered through input‑based measures, notably concessional credit and crop insurance. Preferential credit is available for marketing, working capital and fixed capital investment, forming the core of producer support. Since the late 2000s, eligibility for these instruments has increasingly been conditioned on compliance with environmental requirements and the adoption of specific farming practices, linking income support more closely to sustainability objectives.

Support for general services remains modest relative to production but is strongly oriented towards long‑term productivity. The General Service Support Estimate (GSSE) fell from 3.4% of the agricultural value of production in 2000-02 to 0.8% in 2023-25. More than 80% of this support is allocated to agricultural research and development, technology transfer and extension, with limited resources devoted to inspection, control and infrastructure. The Total Support Estimate (TSE) declined slightly from 0.7% of Gross Domestic Product (GDP) in 2000-02 to 0.4% in 2023-25.

Key policy changes in 2025-26

In 2025-26, Plano Safra, Brazil’s main agricultural policy framework, significantly expanded agricultural financing while tightening environmental and risk-related conditions. Plano Safra’s budget in 2025 was the largest ever, with BRL 516.2 (USD 89 billion) available in total credit, the majority of which has been earmarked for financing working capital. Additional incentives were provided for producers to adopt sustainable practices, including expanded support under RenovAgro for reforestation, fire prevention and the recovery of protected areas.

PRONAF (family farming), also saw record funding in 2025 and expanded targeted credit lines to areas including organic production, climate adaptation and sustainable irrigation, tying spending more closely to policy objectives. Medium‑scale producers continued to access credit under PRONAMP, with eligibility increasingly linked to environmental compliance, while higher financing limits for mechanisation and strengthened risk‑management instruments improved resilience and investment capacity across farm sizes.

Rural credit rules were updated to strengthen monitoring and environmental protections, including the expanded use of remote sensing. To advance its sustainability and climate objectives, Brazil also introduced new initiatives such as the Brazilian Sustainable Taxonomy, large‑scale land restoration and traceability programmes, and continued progress on trade agreements, supporting both market access and alignment with environmental and climate priorities. The Mercosur-EFTA agreement was signed in September 2025, while the Mercosur-European Union agreement was signed in January 2026. Both are pending ratification and entry into force.

Assessment and recommendations

• Continue to enhance the impact of preferential rural credit for family, small and medium-sized producers, while simplifying procedures to improve their access further.

• Link credit programmes more closely linked to sustainable practices through clear eligibility criteria, robust monitoring, and greater support for technologies such as precision agriculture, low-carbon inputs, and climate-resilient practices. Brazil could strengthen agricultural credit policy by expanding outcome-based incentives that link concessional finance to verified sustainability, resilience, and productivity gains, using tools such as remote sensing and traceability systems. Simplifying access conditions and harmonising requirements across programmes would also reduce administrative burdens, particularly for smaller producers.

• Evaluate subsidised insurance schemes to ensure that public support is effective, well-targeted, and complementary to private markets. Regular assessments can identify whether subsidies improve risk coverage and resilience, while helping to avoid market distortions and inform adjustments to programme design so that subsidised and private insurance products work together to strengthen agricultural resilience to climate, production, and market risks.

• Continue to monitor the impacts of environmental criteria embedded in instruments such as zoning (ZARC), the environmental registry (CAR), and the Forest Code (forest protection) on deforestation and emissions. Ongoing efforts to strengthen compliance and enforcement, particularly of the Forest Code, will be important to sustain recent progress in reducing illegal deforestation.

• Gradually increase public investment in general services (GSSE), including R&D and extension. These investments will support innovation and help address the recent slowdown in productivity growth. In particular, investments in logistics and infrastructure. Improving transport, storage, and port infrastructure would reduce costs, limit post-harvest losses, and strengthen competitiveness, specifically for producers in more remote regions. Moreover, deepening digitalisation and data use by expanding digital agriculture, satellite monitoring, farm-level data systems, and traceability tools can improve targeting of policies and strengthen environmental compliance.

• Strengthen targeted extension services and foster regional innovation networks to facilitate knowledge diffusion, reduce productivity gaps, and promote more inclusive development across the sector. Expanding advisory services, especially targeting smallholders, would accelerate the adoption of innovation and sustainable practices.

Key indicators on agricultural support

Table 5.1. Brazil: Estimates of support to agriculture

Million USD

	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	35 530	240 473	238 435	227 484	255 499
of which: share of MPS commodities (%)	77.53	87.38	87.88	85.99	88.27
Total value of consumption (at farm gate)	34 557	127 690	131 525	128 517	123 028
Producer Support Estimate (PSE)	2 868	6 561	10 060	6 454	3 169
Support based on commodity output	1 012	3 141	6 020	3 230	174
Market price support¹	972	3 115	5 967	3 220	158
Positive market price support	1 178	3 115	5 967	3 220	158
Negative market price support	-205	0	0	0	0
Payments based on output	40	26	53	10	16
Payments based on input use	1 856	3 365	3 976	3 173	2 946
Based on variable input use	825	1 619	2 373	1 711	772
with input constraints	0	1 619	2 373	1 711	772
Based on fixed capital formation	955	1 726	1 583	1 442	2 154
with input constraints	0	1 726	1 583	1 442	2 154
Based on on-farm services	76	20	21	20	19
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	55	64	50	50
Based on Receipts / Income	0	55	64	50	50
Based on Area planted / Animal numbers	0	0	0	0	0
With input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	7.56	2.63	4.15	2.80	1.23
Producer NPC (coeff.)	1.03	1.01	1.03	1.01	1.00
Producer NAC (coeff.)	1.08	1.03	1.04	1.03	1.01
General Services Support Estimate (GSSE)	1 242	1 717	1 742	1 646	1 763
Agricultural knowledge and innovation system	663	1 623	1 646	1 551	1 672
Inspection and control	51	17	18	17	16
Development and maintenance of infrastructure	471	45	48	44	43
Marketing and promotion	5	3	3	3	3
Cost of public stockholding	52	29	26	31	29
Miscellaneous	0	-0	0	0	0
Percentage GSSE (% of TSE)	29.79	19.21	13.78	18.54	31.00
Consumer Support Estimate (CSE)	-1 175	-597	-664	-1 644	517
Transfers to producers from consumers	-1 174	-1 309	-1 433	-2 337	-158
Other transfers from consumers	-278	-80	-76	-85	-80
Transfers to consumers from taxpayers	31	793	846	778	755
Excess feed cost	245	0	0	0	0
Percentage CSE (%)	-3.33	-0.46	-0.51	-1.29	0.42
Consumer NPC (coeff.)	1.04	1.01	1.01	1.02	1.00
Consumer NAC (coeff.)	1.03	1.00	1.01	1.01	1.00
Total Support Estimate (TSE)	4 141	9 071	12 648	8 878	5 688
Transfers from consumers	1 451	1 390	1 509	2 422	238
Transfers from taxpayers	2 967	7 762	11 214	6 541	5 530
Budget revenues	-278	-80	-76	-85	-80
Percentage TSE (% of GDP)	0.72	0.40	0.58	0.41	0.25
Total Budgetary Support Estimate (TBSE)	3 169	5 956	6 681	5 658	5 530
Percentage TBSE (% of GDP)	0.55	0.27	0.30	0.26	0.24
GDP deflator (1986-88 = 100)	100	529	506	526	555
Exchange rate (national currency per USD)	2.37	5.32	4.99	5.39	5.59

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient.

A/An/R/I: Area planted/Animal numbers/Receipts/Income.

1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Brazil are: wheat, maize, rice, soybean, sugar, milk, beef and veal, pig meat, poultry, cotton, coffee.

Source: OECD (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Each year, two Plans, the Annual Agricultural and Livestock Plan (Harvest Plan) administered by the Ministry of Agriculture and Livestock (MAPA), and the Family Farming Harvest Plan (Family Plan) managed by the Ministry of Rural Development and Family Farming (MDA), establish the main parameters of Brazil’s agricultural policy and, in particular, for agricultural credit as the main policy instrument. The Plans determine the allocation of resources across different credit lines and set their corresponding interest rates. Brazilian agricultural policy focuses on several core instruments:

• rural credit (in place since the 1960s)

• risk management programmes, including subsidised insurance schemes (since 1991)

• limited use of minimum and reference prices and marketing interventions (such as government food purchases)

• agricultural land zoning combined with environmental compliance requirements (for credit and insurance support), regulatory measures

• promotion of biofuels

• soil restoration and reforestation.

The Harvest Plan prioritises production, focusing on scale, modernisation, and sustainable development. The Family Plan focuses on producers, emphasising social inclusion, agroecology, sustainable irrigation, climate adaptation, productive rural backyards, and improved connectivity and accessibility. Together, these complementary plans seek to strengthen the resilience, productivity, and equity of the agricultural sector.

Preferential-interest rural credit is jointly administered by the Central Bank, the Treasury, the Secretariat of Economic Policy (Ministry of Finance), and MAPA. Most rural credit is channelled through the National Rural Credit System (SNCR) and is offered at preferential interest rates with differentiated conditions for family farmers (PRONAF), small and medium-sized farmers (PRONAMP), and large-sized farms. The main sources of these preferential credit resources include compulsory resources from lending quotas for commercial banks, equivalent to around 30% of demand deposits and 70% from rural savings deposits; other sources are constitutional funds, and loans from the National Bank for Economic and Social Development (BNDES).

Long-term investment credit is provided through several programmes, including RenovAgro (formerly ABC), which supports investments related to climate adaptation and mitigation; Moderfrota, which finances machinery and equipment; the investment components of PRONAF and PRONAMP; and other programmes such as Inovagro and Proirriga. Additional sources of rural financing include the Coffee Fund (FUNCAFÉ) and Agribusiness Credit Notes (LCAs).

The Rural Insurance Premium Programme (PSR) offers subsidised insurance coverage to a range of producers, including commercial farmers who contract policies with insurance companies accredited by the government. The General Agricultural Insurance Programme (PROAGRO) provides farmers with partial compensation for investment losses associated with working capital loans.

Small-scale family farms benefit from PROAGRO-Mais, the family farming insurance programme (SEAF), and, particularly in the northeast region, the Crop Guarantee Programme (Garantia Safra, GS). Since 2012, the registration of georeferenced environmental information for rural properties has been mandatory nationwide. This Environmental Rural Registry (CAR) includes property boundaries, the location of Permanent Preservation Areas, Legal Reserves, Restricted Use Areas, and areas used for agricultural production. Registration and compliance with environmental criteria are required to access any form of government support, including both rural credit and insurance programmes.

Minimum guaranteed prices (PGPM) are applied across the country, with emphasis on the northeast, south, and centre-west regions, and cover selected crops and livestock products. These prices are determined by the National Monetary Council (CMN) based on domestic and international market conditions as well as changes in production costs across regions. The National Food Supply Company (CONAB) implements these programmes on behalf of MAPA. For the 2025-26 harvest, the PGPM covers a group of agricultural products that vary year by year, including key grains for the domestic market. In 2025-26, the government allocated BRL 527.8 million (USD 94 million) to this programme, financing both government procurement and income deficiency payments.

Under the government procurement programme, the state purchases agricultural products directly from farmers for public use, such as supplying schools, hospitals, and food assistance programmes for vulnerable populations. The income deficiency payments are occasionally provided and correspond to the difference between the market price and the established minimum reference price, which are the Rural Equity Prize programme (PEPRO) and the Product Reward Prize programme (PEP). These payments are triggered only when market prices fall below the minimum price.

Three specific measures aim to improve the environmental performance of the agricultural sector. The Rural Product Certificate (CPR Verde) is a bond subject to mandatory registration and authorised by the Central Bank. This instrument represents a commitment to deliver agricultural products in the future under sustainable and conservation practices. It functions as a market-based mechanism for environmental services and has become one of the country’s key instruments for rural financing.

Access to credit and to insurance programmes is conditional on compliance with Agricultural Risk Zoning (ZARC), which identifies climatic risk zones and links agricultural support to farming practices suited to the environmental conditions of each geographic area. In addition, the zoning framework is aligned with the Forest Code, which establishes rules for protecting native vegetation in permanent preservation areas, legal reserves, restricted-use zones, forest exploitation areas, and related categories.

Lastly, since 2010, Brazil has developed the Brazilian Agricultural Policy for Climate Adaptation and Low Carbon Emissions (ABC+ Plan 2020-2030, formerly ABC Plan 2010-2020), a national strategy for adapting agriculture to climate change. The plan aims to reduce greenhouse gas emissions through the adoption of sustainable agricultural practices adapted to Brazilian landscapes and biomes, and acts as the overarching framework for agricultural policy instruments related to climate adaptation and mitigation. During 2010-2020, the plan promoted conservationist production practices on over 50 million ha. The target for 2030 is to extend these practices to an additional 73 million ha, aiming to mitigate over 1 billion tonnes of CO₂ equivalent. Among the practices included in the plan are the recovery of degraded pastures, no-till agriculture, biological nitrogen fixation, integrated crop-livestock-forestry systems, agroforestry, animal waste management, bio-inputs use, biological pest control, water and soil management, and climate-smart livestock management, among others.

Two major initiatives underpinning the ABC+ Plan are the National Bio-inputs Programme, created in 2020 to foster the use of biological inputs and harness local biodiversity for more sustainable agricultural systems, and the Brazilian Greenway Programme, launched in 2022 to restore and convert 40 million hectares of degraded land into productive land within ten years.

Recent policy developments

Domestic policy developments in 2025-26

The Plano Safra (Harvest Plan) 2025-2026 increased the scale of agricultural financing while maintaining policy incentives for sustainable production systems. The Plan provides BRL 516.2 billion (USD 89 billion) in total credit for agriculture, including BRL 414.7 billion (USD 71.4 billion) for working capital and commercialisation and BRL 101.5 billion (USD 17.5 billion) for investment, representing a small increase of 1.5% from the previous cycle. Approximately BRL 174.6 billion (USD 31 billion) is offered at reduced interest rates, including BRL 114 billion (USD 20 billion) where the Treasury pays equalisation rates, which costs the government around 9% of the total credit provided. The programme maintains an additional 0.5 percentage point interest-rate reduction for producers adopting sustainable practices and expands the RenovAgro programme to include financing for fire prevention and control, reforestation and the recovery of protected areas.

Within this framework, family farming (smallholders) receives BRL 89 billion (USD 15.3 billion), including BRL 78.2 billion (USD 13.5 billion) through PRONAF, with concessional interest rates of 3% for staple food production and 2% for organic and agroecological production systems, which on average are 7 to 8 percentage points below market interest rates. The programme also expands credit lines supporting agroecology, sustainable irrigation, soil and water management, rural connectivity and climate adaptation measures.

Mechanisation support was expanded through increased financing limits for agricultural equipment. Credit ceilings were raised to BRL 100 000 (USD 17 000) for smaller equipment, with an interest rate of 2.5%, and up to BRL 250 000 (USD 43 000) for larger machinery, with an interest rate of 5%. Complementary instruments supporting family farmers include BRL 1.1 billion (USD 189 million) allocated to Garantia-Safra, BRL 3.7 billion (USD 637 million) for public food procurement programmes, and BRL 5.7 billion (USD 981 million) for PROAGRO Mais, strengthening risk-management coverage for smallholders.

Support to medium-scale producers under PRONAMP provides BRL 69.2 billion (USD 12 billion) in credit at differentiated interest rates. Access to these incentives is increasingly linked to sustainable practices and compliance with the Rural Environmental Registry (CAR). Investment programmes such as RenovAgro, Proirriga, Inovagro and PCA have updated financing limits and interest rates ranging between 8.5% and 13.5% (2-5 percentage points below the market interest rates), aiming to modernise agricultural infrastructure and encourage sustainable production systems.

Several regulatory updates in 2025 reinforced monitoring, compliance and risk-management mechanisms within Brazil’s agricultural credit framework. Updates to the Rural Credit Manual strengthened supervisory requirements and environmental eligibility criteria. In particular, the use of remote sensing technologies was expanded to support the monitoring of rural credit operations by financial institutions. Complementary provisions were reinforced on social, environmental and climate eligibility requirements for borrowers and lenders, strengthening safeguards associated with rural credit disbursement.

Additional instruments and a dedicated rural credit line were established to allow the settlement or amortisation of debts of rural producers located in municipalities affected by adverse climatic events. These measures aim to preserve payment capacity, stabilise rural credit portfolios and ensure continuity of agricultural production.

The National Program for Strengthening Family Farming (PRONAF) and the Family Farming Plan were consolidated in statutory law, formalising governance arrangements and financial instruments that underpin concessional credit for family farmers. Complementary risk-management mechanisms were strengthened through reforms to the Garantia-Safra Fund and Benefit, improving protection for vulnerable producers in regions affected by droughts and other climatic shocks.

To facilitate agricultural research, certain regulatory fees for research registrations and protections conducted by Embrapa have been waived since December 2025. In addition, guidelines for Good Agricultural Practices at the primary production stage were established in January 2026 to improve sustainability, sanitary compliance and product quality in agriculture.

The Brazilian Sustainable Taxonomy, established in November 2025, is a voluntary classification framework designed to guide sustainable finance and investment decisions across sectors, including agriculture. The taxonomy guides financial institutions and investors and is expected to influence agricultural credit eligibility, pricing and reporting requirements across agri-food value chains.

Climate adaptation measures increased their scope and improved the implementation mechanisms through the Climate Adaptation Plan (2025 cycle), which sets targets and actions for agriculture and family farming. The plan promotes the adoption of sustainable production systems and supports environmental compliance through the restoration of Permanent Preservation Areas (APPs) and Legal Reserves, as well as financing for agroforestry systems and sustainable soil management practices.

The Eco Invest Brazil programme, launched in February 2024, is part of the Brazilian Greenway initiative to support the recovery of degraded land through blended finance instruments. The programme includes monitoring, reporting and verification (MRV) protocols, including remote sensing technologies, and prioritises integrated crop-livestock-forestry systems (ILPF), agroforestry systems and forest restoration. In addition, in November 2025, the RAIZ initiative (Resilient Agriculture Investment for Net Zero Land Degradation) was launched in the context of preparations for COP30 in Belém, in partnership with FAO. The initiative aims to mobilise rural credit, payments for ecosystem services, environmental regularisation instruments and private investment to promote large-scale restoration of degraded land.

In 2025, the READAPTA network was launched as part of the 2024 National Policy for the Conservation and Sustainable Use of Genetic Resources. It aims to integrate conservation initiatives with breeding programmes aimed at improving climate adaptation. In June 2025, the Integrated Traceability System (SIR) became part of the National Voluntary Traceability Plan (PNRV). It aims to standardise supply-chain information and facilitate voluntary traceability across agri-food value chains, supporting market access for producers and co‑operatives. Lastly, in 2025, Brazil recorded a historic high in the registration of new agricultural inputs, including 139 new biological products. In soybeans, more than 80% of producers use biological nitrogen fixation, covering over 45 million hectares, thereby reducing costs, external dependence, and emissions.

Trade policy developments in 2025-26

The Mercosur-European Union trade agreement was signed on 17 January 2026, while the Mercosur‑EFTA agreement was signed on 16 September 2025. Similar to the Mercosur-Singapore agreement, signed in December 2023, these agreements remain pending ratification and formal entry into force, although a part of the Mercosur-EU Interim Trade Agreement (iTA) has entered into force on 1 May 2026.

Temporary import measure adjustments were introduced to address supply constraints for selected food products. These include zero-tariff quotas for sardines (120 000 tonnes) and wheat gluten (28 000 tonnes) under temporary MFN tariff reductions.

In May 2025 Brazil was recognised by the World Organisation for Animal Health (WOAH) in May 2025 to be free of foot-and-mouth disease without vaccination. This status strengthens Brazil’s sanitary reputation, supports improved market access for livestock products and reduces vaccination costs for producers.

Policy context

Key economic and agricultural statistics

Brazil is one of the world’s ten largest economies and the largest country in Latin America by both area and population. It is endowed with abundant land and water resources, underpinning its position as a leading global agricultural producer and exporter. Agriculture’s share of GDP rose from 5.5% in 2000 to 5.8% in 2024, while its share in employment declined from 15.4% to 7.7% over the same period (Table 5.2). Agro-food exports play a central role in Brazil’s economy, accounting for 42.9% of total exports in 2024. Arable land accounts for 23.5% of total Brazilian agricultural land. Brazil ranks among the world’s top producers of soybeans, poultry, beef, cotton, maize and orange juice. Crop production accounts for 66% of the total value of agricultural output, with livestock contributing the remaining 34%.

Table 5.2. Brazil: Contextual indicators

	Brazil		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	1 582	4 736	3.9%	2.8%
Population (million)	174	212	4.0%	3.9%
Land area (thousand km2)	8 358	8 358	10.0%	9.8%
Agricultural area (AA) (thousand ha)	228 324	236 759	7.6%	8.0%
			All countries1
Population density (inhabitants/km2)	21	25	52	64
GDP per capita (USD in PPPs)	9 092	22 338	9 508	31 740
Trade as % of GDP	8.8	14.1	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	5.5	5.8	3.0	3.6
Agriculture share in employment (%)	14.2	7.7	-	-
Agro-food exports (% of total exports)	23.4	42.9	6.4	8.3
Agro-food imports (% of total imports)	7.2	5.6	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	67.3	66.3	62.1	60.4
Livestock in total agricultural production (%)	32.7	33.7	37.9	39.6
Share of arable land in AA (%)	19.9	23.5	33.0	34.0

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Brazil’s real GDP growth reached around 2.44% in 2025, confirming the stabilisation observed since 2021, after the deep contraction in 2020. Economic growth has remained positive but moderate, supported by domestic demand and a recovery in services, though it remains below the high growth rates seen in previous expansion cycles. Unemployment continued to decline, falling to around 7.65% in 2025, a substantial improvement from its pandemic peak of nearly 13.74% in 2020, reflecting the gradual recovery of labour market conditions. Inflation reached 5.02% in 2025, down from the high levels recorded in 2021‑22, when inflation exceeded 9.27%; this decrease has been mainly driven by falling food and energy prices, as well as tighter monetary conditions.

Brazil’s agro-food exports have exceeded USD 100 billion annually since 2021, reaching close to USD 144.48 billion in 2024, while imports remained comparatively limited. As a result, Brazil generated a very large agro-food trade surplus of around USD 129 billion in 2024, reflecting its strong competitiveness in global agricultural markets. The composition of trade highlights Brazil’s role as a major supplier of raw and intermediate agricultural inputs: in 2023, about 56% of exports consisted of primary products for industry, and a further 22% of processed products for industrial use, underscoring the importance of global value chains linked to feed, food processing and bio industries. By contrast, agro-food imports were dominated by processed products, with around 40% processed for consumption and 26% processed for industry, pointing to Brazil’s reliance on imported higher-value food products and industrial inputs despite its large primary production capacity (Figures 5.5A and 5.5B).

Between 2014 and 2023, Brazilian agricultural production increased at an annual rate of 2.3%, above the world average (1.8%). Production increases were driven by intermediate input growth (1.41%) and Total Factor Productivity (TFP) growth of 0.87% per year, which is above the global average (0.77%), underscoring the central role of efficiency improvements, technological adoption, and innovation; while use of primary factors in agricultural production is marginal of 0.04% per year during the period 2014-23 (Figure 5.6).

Agriculture accounted for 50.4% of Brazil’s total greenhouse gas emissions, slightly below its share in 2000 (51%), but still well above the OECD average of 8.7% (Table 5.3). The sector’s energy use increased to 5.6% of total final energy consumption over 2014–23, also exceeding the OECD average, reflecting the relatively large weight of agriculture in the Brazilian economy. Agriculture also remains a major user of water, accounting for 60.3% of total water abstractions, although overall water stress remains low (0.9). At the same time, nutrient surpluses for nitrogen and phosphorus have risen since 2000, with phosphorus balances now above the OECD average, raising concerns about nutrient management and environmental pressures.

Table 5.3. Brazil: Productivity and environmental indicators

	Brazil		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	2.9%	0.9%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	21.1	26.2	32.3	29.0
Phosphorus balance, kg/ha	11.8	18.8	3.3	2.3
Agriculture share of total energy use (%)	4.8	5.6	1.7	2.0
Agriculture share of GHG emissions (%)	51.0	50.4	8.7	10.3
Share of irrigated land in AA (%)	1.9	3.9	-	-
Share of agriculture in water abstractions (%)	50.0	60.3	46.1	47.7
Water stress indicator	0.6	0.9	..	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Before the 1990s, Brazil had a history of government intervention in the agricultural sector. Price interventions were first introduced in the 1940s amid food security concerns, and starting in the 1950s, Brazil adopted an import-substitution industrialisation strategy with wide-ranging controls over supply and prices in the agro-food sector. Prices were both supported for producers and subsidised to consumers.

The National Agency for Food Supplies (SUNAB) regulated the distribution of basic foodstuffs and set prices and profit margins for all levels of the food chain, including low prices for consumers. SUNAB also controlled agro-food imports and exports. At the producer level, a general price support system existed for rice, maize, soybeans, beans, cassava, and cotton. Another government agency, the Company for Production Financing (CFP), carried out direct purchases of these commodities at minimum guaranteed prices. Marketing boards were created for wheat, sugar, and coffee. They set overall production volumes, administered marketing quotas, and controlled prices and trade (Anderson and Valdes, 2007[1]; OECD, 2005[2]).

These policies continued until the late 1980s, when the government undertook a general restructuring of the economy. Trade was liberalised, state-owned enterprises privatised, domestic markets deregulated, and a customs union established with other South American countries (Mercosur). Agricultural policies were no exception to this move towards openness and less state intervention. State enterprises related to agriculture were dismantled or their functions reduced. Agricultural import tariffs were substantially reduced. Export licensing for primary agricultural products was removed. Brazilian producers faced fewer controls and obtained freer access to world commodity and input markets (OECD, 2015[3]).

In this context, Law No. 8,171 of 17 January 1991 (Agricultural Policy Law) established the legal framework for Brazil’s modern agricultural policy. The Law consolidated the principles, objectives and instruments guiding government action in the agricultural sector, covering areas such as rural credit, agricultural insurance, minimum price guarantees, marketing, storage, agricultural research, technical assistance and risk management. It also recognised the conservation of natural resources as an integral element of Brazil’s agricultural policy framework.

Since the mid-2000s, policy has emphasised support to smallholders and setting minimum prices for staples produced in the poorest regions of the country. Purchases of staple foods to be distributed to poor populations have been enhanced, and mandatory sugar cane ethanol fuel-blending continues to be imposed. The National Programme for the Production and Use of Biodiesel was established in 2005, and the blending of biodiesel with mineral diesel became mandatory in 2008. The blend percentage varies between 6% and 15%. Biodiesel is sold through public auctions, where preference is given to manufacturers that support family farming. In addition to prioritising the acquisition of raw materials from family farms, technical assistance by the government is targeted at these farms. Since 2023, the country has emphasised environmental sustainability measures for the sector, such as adaptation and mitigation to climate change, as well as reducing deforestation rates (Table 5.4).

Table 5.4. Brazil: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1990s	Import substitution Industrialisation model Closed economy	Fixed exchange rates High agricultural tariffs Production and marketing control of agricultural products (CFP state company) Minimum agricultural prices for producers (CFP state company) Subsidised prices of agricultural products for consumers (SUNAB state company) Creation of the Brazilian Agricultural Research Corporation (EMBRAPA) Consumption of sugar cane ethanol is stimulated through obligatory blending of ethanol with gasoline
1990-2005	Reforms to trade liberalisation	Agricultural Policy Law (No.8171/1991) Floating exchange rates Removal of agricultural price and output controls Reduction of agricultural tariffs of both outputs and inputs Dismantling of marketing boards for wheat, sugar and coffee Dismantling of SUNAB and CFP WTO agreement and Mercosur signed Minimum prices of basic products kept but reduced Subsidised credits (working capital and marketing loans) enhanced as the financial crisis hit farmers Liberalisation of the wheat, coffee and sugar sectors Creation of the Ministry of Rural Development and Family Farming (MDA) Consumption of sugar cane ethanol was also stimulated by the growth of the flex fuel vehicle fleet. Flex Fuel cars have represented more than 85% of new vehicle sales in Brazil since the late 2000s. Law 8 929/1994, creates the Rural Product Certificate (CPR), a bond of mandatory registration authorised by the Central Bank.
2005-2015	Continuing reforms and emphasis on sustainability	Subsidised agricultural credit and insurance subsidies as main agricultural policy, supported by the Law of agribusiness bonds 11076/2004. Minimum prices of basic products set for smallholders through government purchases of staple foods Sugar cane ethanol ratio policy continues to apply Government purchases of staples kept in order to provide food to poor populations Institutionalisation of the National Programme for the Production and Use of Biodiesel. Current regulations of blending ranged between 6% and 15%. Law No. 12 114, 2009 - Creates the National Fund on Climate Change. Law No. 12 187, 2009 - Institutes the National Policy on Climate Change – PNMC. The law establishes the guidelines for the different national sectors, including agriculture, to contribute to the commitments to reduce GHG emissions and adapt to climate change. Decree No. 7 390, 2010 (Art. 3, item IV) established the Sectoral Plan for Mitigation and Adaptation to Climate Change for the Consolidation of a Low-Carbon Economy (ABC Plan), a strategy to consolidate mitigation and adaptation actions. Law 12 651, 2012 (Forest Code) establishes standards for protecting native vegetation in permanent preservation areas, legal reserves, restricted use, forest exploitation, and related matters. Since 2010. Sustainability emphasis on measures for adaptation and mitigation to climate change in agriculture.
2015-2022	Institutional changes and continuous emphasis on sustainability	Incorporation of the structure of the Ministry of Rural Development and Family Farming (MDA) into the into the Ministry of Agriculture and Livestock (MAPA) in 2019, then reinstated as an independent Ministry in 2023. Decree No. 10 606/2021 - Establishes the Integrated Information System of the Sectoral Plan for Consolidation of a Low-Carbon Economy in Agriculture and the Technical Committee for Monitoring the Sectoral Plan for Consolidation of a Low-Carbon Economy in Agriculture. Decree No. 10 828/2021 regulated the issuance of Rural Product Certificate (CPR). The bond was adjusted to be a market alternative for immediate and large-scale adoption of Payment for Environmental Services (PSA).
2023-present	Continuing institutional changes and more emphasis on sustainability	Relatively low support, with subsidised credit continuing as key agricultural policy tool. New competences of the 2023 MDA include family farming, agrarian reform, incorporation of several state enterprises such as CONAB (national supply), CEASA-Minas (wholesale Minas), CEAGESP (warehouse company), ANATER (extension services) and INCRA (agrarian reform). In 2023, MAPA created under its structure the Department of Reforestation and Recovery of Degraded Areas. In 2023, Decree 11 815 established the National Program for the Conversion of Degraded Pastures into Sustainable Agricultural and Forestry Production Systems. Continuous emphasis on the sustainability of rural credit and on strengthening climate change adaptation and mitigation measures.

Brazil provides a relatively low aggregate level of support and protection to agriculture, reflecting its position as a competitive exporter and price maker for a range of commodities. Brazil’s support to agricultural producers included market price support and input subsidies. Market price support (MPS) gradually disappeared from 2013-21, and PSE was dominated by preferential credit interest rates and insurance subsidies. In recent years, the share of MPS has increased alongside budgetary support (Figure 5.7).

References

[1] Anderson, K. and A. Valdes (2007), Distortions to Agricultural Incentives in Latin America, World Bank Group, Washington, DC, http://documents.worldbank.org/curated/en/518211468170062688/Distortions-to-agricultural-incentives-in-Latin-America.

[3] OECD (2015), Innovation, Agricultural Productivity and Sustainability in Brazil, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264237056-en.

[2] OECD (2005), OECD Review of Agricultural Policies: Brazil 2005, OECD Review of Agricultural Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264012554-en.