The federal government sanctioned on Wednesday (14) the Annual Budget Law of 2026 (Law No. 15,346), which provides R$ 1.017 billion for the subsidy to the rural insurance premium and R$ 6.618 billion for Proagro. Despite the maintenance of resources, the Parliamentary Agricultural Front (FPA) assesses that the absence of budgetary protection for rural insurance keeps the program vulnerable to contingencies and announces articulation in Congress to overturn the presidential veto of the Budget Guidelines Law (LDO).<\/p>\n
According to the parliamentary group, the main problem is not the amount authorized by Parliament, but the effective execution of the resources. In 2025, although the National Congress approved approximately R$1.06 billion for the program, the federal government released approximately R$565 million, resulting in the blocking of almost half of the budget. \u201cCongress approved the amounts precisely to prevent cuts in policies essential to crop planning. The problem is that, without protection in the Budget Guidelines Law (LDO), the government can again freeze the resources, which compromises the security of rural producers,\u201d stated the president of the FPA (Parliamentary Agricultural Front), Pedro Lupion.<\/p>\n
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<\/p>\nFPA president, Pedro Lupion: \u201cCongress approved the amounts precisely to prevent cuts in policies essential to crop planning\u201d \u2013 Photos: FPA Press Release<\/p>\n<\/div>\n
According to Lupion, the amount projected for 2026 can be considered adequate in the short term, provided there is full implementation. \u201cIf the government fulfills 100% of the budget approved by Congress, the amount allocated to rural insurance is reasonable for this year. The risk is repeating what happened in 2025, when only part of the funds reached the producer,\u201d he said.<\/p>\n
Agricultural insurance coverage, for example, fell from approximately 17% of the cultivated area in 2021 to approximately 8% in the 2024\/2025 crop year, in a context of increased frequency of extreme weather events and sanitary risks. For the president of the FPA (Brazilian Parliamentary Front for Agriculture), this scenario reinforces the need for predictability. "Without budgetary security, the producer is exposed precisely when risks increase," he stated.<\/p>\n
Entities in the productive sector argue that, in the medium term, the ideal volume of resources for rural insurance would be in the order of R$ 4 billion. Lupion, however, considers that this expansion would need to occur gradually. "It's not about taking an immediate leap. It's growth that needs to respect the operational capacity of insurance companies and the maturity of the market," he said.<\/p>\n
Proagro<\/h4>\n
In the case of Proagro, the approved budget for 2026 is R$ 6.618 billion, approximately six times higher than that allocated to rural insurance, and is within the program's expected needs. The main difference between the two instruments is budgetary in nature: Proagro is classified as mandatory spending, while rural insurance remains discretionary spending, subject to cuts throughout the year.<\/p>\n
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<\/p>\nRepresentative Z\u00e9 Vitor: "Without a guarantee of resource allocation, producers lose predictability and the country loses its ability to plan the harvest."<\/p>\n<\/div>\n
\u201cIn practice, this means that Proagro cannot be blocked, while rural insurance can. This asymmetry weakens the risk management policy in the field,\u201d said Lupion.<\/p>\n
According to Congressman Z\u00e9 Vitor (PL-MG), a member of the FPA (Parliamentary Agricultural Front), budgetary insecurity directly compromises the sector's predictability. "Rural insurance is a fundamental instrument for providing stability to producers, especially in the face of increasing extreme weather events. Without a guarantee of resource allocation, producers lose predictability and the country loses its ability to plan the harvest," he said.<\/p>\n
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<\/p>\nCongressman Arnaldo Jardim: "Congress approved a provision that equated rural insurance with Proagro precisely to provide predictability."<\/p>\n<\/div>\n
Along the same lines, Congressman Arnaldo Jardim (Cidadania-SP), vice-president of the FPA in the Chamber of Deputies, emphasized that the veto of the Budget Guidelines Law maintains a distortion that harms agricultural planning. "Congress approved a provision that equated rural insurance with Proagro precisely to provide predictability. The veto preserves a weakness that directly impacts the producer," he said.<\/p>\n
Former FPA president Alceu Moreira (MDB-RS) believes the discussion goes beyond the annual budget and involves the country's strategy for the agricultural sector. "Rural insurance is a state policy. Without full execution of resources and without institutional stability, the producer assumes risks that should be shared by a structured public policy," he stated.<\/p>\n
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<\/p>\nFormer FPA president, Alceu Moreira: "Rural insurance is a state policy"<\/p>\n<\/div>\n
The government justified the veto of the LDO (Budget Guidelines Law) provision by arguing that budgetary protection would reduce the flexibility of fiscal management and hinder the achievement of the established goals for the year. The decision also affected areas such as agricultural defense and research and innovation programs at Embrapa (Brazilian Agricultural Research Corporation).<\/p>\n
Given this scenario, the FPA emphasizes that overturning the veto on the Budget Guidelines Law (LDO) will be one of its priorities when legislative work resumes in February. "The goal is to ensure that rural insurance remains mandatory and that the resources approved by Congress are fully utilized, avoiding cuts like those seen last year," concluded Lupion.<\/p>\n
Understand the veto of the Budget Guidelines Law.<\/strong><\/p>\n The controversy surrounding rural insurance is linked to a veto by President Luiz In\u00e1cio Lula da Silva (PT) of the Budget Guidelines Law (LDO), which defines the rules for the execution of the Budget throughout the year.<\/p>\n What Congress approved<\/strong><\/p>\n At the suggestion of the Parliamentary Agricultural Front, the Budget Guidelines Law (LDO) approved by Congress classified the subsidy for rural insurance premiums as a mandatory expense, in the same way as Proagro. In practice, this would prevent the withholding of funds throughout the year.<\/p>\n What was vetoed by the government<\/strong><\/p>\n The president vetoed the provision that provided this protection to rural insurance, arguing that the measure would reduce the flexibility of fiscal management and could hinder the achievement of budgetary targets.<\/p>\n What is the practical difference?<\/strong><\/p>\n With the veto upheld, rural insurance remains a discretionary expense, subject to freezes or cuts during budget execution. Proagro, classified as a mandatory expense, cannot be subject to budget cuts.<\/p>\n Why does the FPA criticize the veto?<\/strong><\/p>\n The agricultural lobby argues that, without a guarantee in the Budget Guidelines Law (LDO), the risk lies not in the amount approved by Congress, but in the possibility that the government will not fully execute the resources, as happened in 2025.<\/p>\n Next step in Congress<\/strong><\/p>\n The FPA announced that it will work to overturn the veto when legislative work resumes in February, to ensure predictability in crop planning.<\/p>\n<\/div>\nTHE Bela Cereais<\/strong> works with the best grains on the market and also keeps you up to date with the latest news and analyses on agribusiness.
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