Brazil's Lula announces $2.2 billion debt relief package for farmers

SAO PAULO (Reuters) -Brazilian President Luiz Inacio Lula da Silva announced on Friday a 12 billion reais ($2.21 billion) debt renegotiation package aimed at supporting up to 100,000 agricultural producers, primarily small and medium-sized farmers affected by recent climate events.

WHY IT'S IMPORTANT

The measure comes as Brazil's largest state-run bank, Banco do Brasil, faces record default levels in its agribusiness portfolio, threatening the stability of the country's crucial agricultural sector.

BY THE NUMBERS

The executive order signed by Lula guarantees 12 billion reais in total relief funding to up to 100,000 producers eligible for support.

Banco do Brasil currently has 20,000 defaulting clients, its CEO Tarciana Medeiros said last month.

KEY QUOTES

"Today I signed an executive order that guarantees the renegotiation of rural debts under special conditions," Lula said in a social media post. "This means more security for those who work the land, more food on Brazilian tables, and a stronger country in the face of climate change."

CONTEXT

Brazilian farmers have faced mounting challenges in recent years, including severe weather events, high interest rates, and elevated input costs. The agricultural sector is crucial to Brazil's economy as a top global supplier of grains, coffee, meat, cotton, and sugar.

The relief package aims to ensure food security and support farmers struggling with climate-related challenges.

($1 = 5.4212 reais)

(Reporting by Fernando Cardoso; Editing by Aurora Ellis)

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