Senate approves legal framework for rural insurance with mandatory subsidy in PLOA
Quick Look
- The Senate approved in a symbolic vote the bill that establishes a legal framework for rural insurance, making the economic subsidy a mandatory expense foreseen in the PLOA 2027 with R$1.2 billion.
- The text goes to presidential sanction after an agreement that excluded the use of Proagro resources.
- The measure meets agribusiness demand given the 76.64% reduction in the insured area between 2021 and 2025, despite the increase in planted area.
AI-generated summary
Why It Matters
The bill was a demand from the agribusiness bench due to successive crop losses due to extreme weather events in recent years, which reduced confidence in rural insurance.
The Senate approved this Thursday (2) the bill that defines a legal framework for rural insurance. The proposal makes the economic subsidy a mandatory expense that is now provided for in the PLOA (Budget Bill), within the resources allocated to the Ministry of Agriculture and Livestock.
The text was approved in a symbolic vote during the concentrated effort of the Chamber and Senate, the last window of votes and discussions before the electoral period. The proposal has already been analyzed by deputies and now goes to presidential approval.
An agreement made by the government conditioned the subsidy expenditure on compensation measures. The 2027 PLOA provides R$1.2 billion for rural insurance subsidies.
The rapporteur of the proposal in the plenary, senator Jaime Bagattoli (PL-RO), also agreed to remove from the proposal the forecast for the use of Proagro (Agricultural Activity Guarantee Program) resources.
This possibility was criticized by PT parliamentarians in the Chamber, who considered the mechanism a distortion of Proagro, which is aimed at family farming. The article that dealt with the subject was left out of the final text.
The bill was a demand from the agribusiness bench, which demanded more security for the instrument after successive crop losses due to extreme weather events in recent years.
Bagattoli defended in the plenary that the proposal be approved in this Thursday's session, as the month of September marks the beginning of planting. For producers to be able to take out insurance under the new rules, the law must already be in force.
Data from CNSeg (National Confederation of Insurers) show a 76.64% reduction in the insured planted area in the country between 2021 and 2025.
This scenario of reduction in the insured area goes against the grain of the planted area, which went from 83.9 million hectares in 2021 to 97.8 million last year.
The drop, according to the sector, is the result of the reduction in subsidy resources for rural insurance premiums, the increase in the cost of policies and the environment of greater uncertainty and financial pressure in the countryside, which made many producers prioritize liquidity in the short term.
The proposal signed by Senator Tereza Cristina (PP-MS) establishes deadlines of 15 days and 30 days for proving losses and releasing compensation payments. The project also provides for the creation of a supplementary coverage fund, in which the Union may be a shareholder.
What to Watch
AI outlook — possibilities, not facts
The president will sanction the bill within 15 working days.
Likely · Within days
Open Questions
- When will the president sign the bill into law?
- How will the supplementary coverage fund foreseen in the project be structured?
- What will be the criteria for the Union to be a shareholder in the supplementary coverage fund?
