Resolution CMN No. 2187 — Rural Credit Supported by Controlled Resources and Debt Renegotiation (Amendments to Resolution No. 2,164 of June 19, 1995)

RESOLUTION NO. 002187

Dispenses with rural credit supported by controlled resources and debt renegotiation (amendments to Resolution No. 2,164 of June 19, 1995).

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the President of the NATIONAL MONETARY COUNCIL, by act of August 4, 1995, based on Article 8, paragraph 1, of Law No. 9,069 of June 29, 1995, "ad referendum" of that Council, and considering the provisions of Article 4, item VI, of the aforementioned Law No. 4,595, and Articles 4 and 14 of Law No. 4,829 of November 5, 1965,

RESOLVES:

Art. 1. To define as controlled resources of rural credit, as referred to in Article 1 of Resolution No. 2,164 of June 19, 1995, those originating from the Rural Savings Book (MCR 6-4), the Worker Protection Fund (FAT), and the Extramarket Investment Fund, when applied in operations subsidized by the Union in the form of financial charge equalization.

Art. 2. To admit the granting of credit, supported by controlled resources, destined for:

I - EGF (Federal Government Loan) related to the product of the Northeast 1995 harvest;

II - EGF/COV (EGF/With Sale Option) to beneficiaries, industries, and exporters, with the limit restricted to the amount necessary for the settlement of working capital credits with a product equivalence clause.

Sole Paragraph. The EGF/COV destined for the settlement of working capital credit with a product equivalence clause must fully absorb the debtor balance of the working capital through the linking of the originally defined quantity of product, with the appropriate physical or financial compensations carried out, and is subject to the financial remuneration agreed upon in the working capital credit.

Art. 3. To admit the granting of credit to cooperatives, supported by mandatory resources (MCR 6-2), for the purchase of inputs for supply (MCR 5-2-1-b), exclusively to member miniproducers and small producers, observed that:

I - the credit limit must be defined by the financial institution, with strict observance of the provisions in MCR 5-2-9 and 10, considering exclusively the demand for inputs by members belonging to those categories of producers;

II - the balance of the operation will be computed for compliance with the percentage of exigibility referred to in MCR 6-2-12.

Art. 4. The working capital credits eligible for support in product equivalence, as referred to in Article 2, item III, letter "a", of Resolution No. 2,164, are those destined for cotton, rice, beans, cassava, corn, soybeans, and wheat.

Art. 5. The renegotiation of debts referred to in Article 5 of Resolution No. 2,164, when for the benefit of a miniproducer or small producer, must be formalized under the following conditions, maintaining the product equivalence originally agreed upon and observing the other provisions of the aforementioned Resolution:

I - a term of 3 (three) years;

II - amortization of 50% (fifty percent) of the amount of debts eligible for renegotiation, up to the date of formalization;

III - the payment of the renegotiated balance must follow the following schedule:

a) 34% (thirty-four percent), in the 1995/1996 harvest;

b) 34% (thirty-four percent), in the 1996/1997 harvest;

c) the remainder in the 1997/1998 harvest.

Art. 6. In the case of working capital financing with a product equivalence clause, not eligible under the provisions of the previous article, the payment referred to in item I of Article 5 of Resolution No. 2,164 may be made through the delivery of a document representative of the storage of units equivalent to the required percentage, with the debtor assured the equivalence mechanism for settling the renegotiated percentage, with the delivery of product in equal installments in the 1995/96 and 1996/97 harvests.

Art. 7. The Secretariat of Agricultural Policy of the Ministry of Agriculture, Supply, and Agrarian Reform and the Secretariat of Economic Monitoring of the Ministry of Finance are authorized to make the adjustments necessary for the execution of the provisions of this Resolution, which will be published by the Central Bank of Brazil.

Art. 8. This Resolution enters into force on the date of its publication.

Art. 9. Paragraph 2 of Article 5 of Resolution No. 2,164 of June 19, 1995, and Resolution No. 2,174 of July 6, 1995, are hereby repealed.

Brasília, August 9, 1995

Gustavo Jorge Laboissière Loyola
President