CMN Resolution No. 4823 Authorizes Renegotiation of FTRA Financing for Family Farmers Affected by Drought and Amends Credit Contracting Norms

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes it public that the National Monetary Council, in an extraordinary session held on June 17, 2020, considering the provisions of item VI of Article 4 of Law No. 4,595 of 1964, Articles 4 and 14 of Law No. 4,829 of November 5, 1965, Article 7 of Complementary Law No. 93 of February 4, 1998, Article 5 of Law No. 10,186 of February 12, 2001, Article 23 of Law No. 12,599 of March 23, 2012, and Decree No. 4,892 of November 25, 2003,

R E S O L V E S:

Art. 1 Financial institutions operating the resources of the Land and Agrarian Reform Fund (FTRA) are authorized, in municipalities that declared a state of emergency or public calamity in the period from January 1, 2020, until the date of publication of this Resolution, due to the occurrence of drought or dry spells, with recognition by the State Government, to renegotiate, for up to 1 (one) year after the final maturity of the contract, the installments of principal and due and future interest in the period from January 1, 2020, to December 29, 2020, of the land credit operations contracted with FTRA resources, in a compliant status as of December 30, 2019, maintaining the normal financial charges and the agreed compliance rebates and bonuses.

§ 1 Borrowers must request the renegotiation referred to in this article by December 29, 2020, and the financial institution must formalize it, by means of an amendment, within a period of up to 90 (ninety) days after the request.

§ 2 The renegotiation referred to in this article applies to financing in a non-compliant status as of December 30, 2019, provided that previous debts are settled by the date of the renegotiation request.

§ 3 For the purposes of the renegotiation provided for in this article, the provisions of items 11 to 19 of MCR 12-1 do not apply.

Art. 2 Section 1-A (Land and Agrarian Reform Fund Plus) of Chapter 12 (Special Programs) of the Rural Credit Manual (MCR) shall be in effect with the following alterations:

“1 - Financing for the acquisition of rural property, supported by the resources of the Land and Agrarian Reform Fund (FTRA), granted from July 1, 2020, shall comply with the provisions of Decree No. 4,892 of November 25, 2003, and the following conditions:

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b) credit limit: up to R$140,000.00 (one hundred and forty thousand reais) per beneficiary, observing that the technical financing project must:

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f) .............................................................

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III - effective interest rate of 4.0% p.a. (four percent per year): annual gross family income up to R$216,000.00 (two hundred and sixteen thousand reais) and assets up to R$500,000.00 (five hundred thousand reais) in any region;

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“5 - ...........................................................

a) basic investments for the initial structuring of the productive units of the acquired properties, thus considered the investments in basic infrastructure, including Technical Assistance and Rural Extension (ATER), in the amount of up to R$10,000.00 (ten thousand reais), divided into up to 5 (five) annual installments, according to the terms of the Operational Regulation of the Land and Agrarian Reform Fund, provided that the borrower is not benefiting from ATER within the scope of the National Program of Technical Assistance and Rural Extension in Family Agriculture and Agrarian Reform (Pronater), governed by Law No. 12,188 of January 11, 2010;

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“6 - The value of financing intended for basic investments and ancillary expenses, referred to in items “a” and “b” of item 5, cannot exceed, per beneficiary, 50% (fifty percent) of the total value of the financing, observing, furthermore, the credit limit referred to in item “b” of item 1.” (NR)

Art. 3 Items 13 and 14 of Section 1-A of Chapter 12 of the MCR are hereby revoked.

Art. 4 This Resolution enters into force on the date of its publication.

Roberto de Oliveira Campos Neto President of the Central Bank of Brazil