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The Finance and Special Budget Committee issued a favorable opinion to amend the 2026 Budget Law and incorporate US$620,000 into the Fideicomiso Especial del Sector Agropecuario (FIDEAGRO). These resources would allow for the maintenance of preferential financing conditions for agricultural producers, particularly those engaged in livestock farming.
The proposal includes creating a new line of work within the Agriculture and Livestock Sector to transfer the funds to the Banco de Fomento Agropecuario (BFA), which acts as trustee for FIDEAGRO. The money would come from the General Fund and would have two main objectives: to strengthen the trust’s assets and to compensate the BFA for the preferential interest rates applied to loans for the livestock sector.
FIDEAGRO was created in 2000 as a mechanism to facilitate financing for agricultural activities. Its functions include managing a loan portfolio and using the recovered funds to provide new loans to producers, thus creating a system that ensures the continued availability of resources for the sector.
The trust also has a Guarantee Fund, established following reforms approved by the Legislative Assembly in march 2022. This mechanism aims to support agricultural producers and production chains seeking financing through the BFA.
These reforms established an initial capital of US$3 million for the Guarantee Fund, derived from FIDEAGRO loan recoveries. Additionally, US$2 million was allocated to compensate the BFA for the preferential rates applied to loans granted to agricultural producers and their production chains.
In this context, the additional US$620,000 would allow for the continuation of this compensation scheme and prevent the cost of maintaining lower interest rates from falling directly on the BFA’s operations. This would allow the bank to continue offering financing under more accessible conditions for producers.
The mechanism is especially relevant for activities that require constant investment, such as livestock farming and other agricultural sectors, where producers need resources to acquire input, improve their operations, and strengthen their production units. Maintaining preferential rates can reduce the financial cost of these loans and facilitate access to financing.
The proposal approved in committee must continue its legislative process so that the funds can be formally incorporated into the budget. If the reform is approved, the objective will be to maintain agricultural producers’ access to loans with preferential rates, while simultaneously strengthening FIDEAGRO’s capital and the BFA’s capacity to continue financing the sector.
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