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Half of Brazilian Farmers Are Having a Hard Time Repaying Their Loans |
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Written by Cecília Jorge
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Tuesday, 28 June 2005 |
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A study released today by the Brazilian Confederation of Agriculture and Livestock (CNA) affirms that the incomes of half the farmers are entangled with repaying loans obtained to cover operational expenses.
The study, which was conducted in May, is based on interviews with 2,298 farmers from around the country to gauge the dimensions of the rural credit crisis.
According to the study, 10% of the interviewees have more than 60% of their gross income tied up in loan payments. Only 11% were successful in renegotiating their debts with banks on loans to cover operational expenses.
Another 12% who attempted to renegotiate their debts on loans for investment purposes obtained extensions of the debt repayment period.
The study also found that 49.2% of the farmers tried to obtain loans for operational expenses in the most recent harvest, but only 8% were able to get all the financing they needed at an 8.75% annual interest rate. The rest were forced to accept loans at higher interest rates.
ABr
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