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Conab Releases R$ 300 Million to Ensure Income and Minimum Price for Rice Producers and Prevent Losses in the 2025/26 Grain Harvest.
The National Supply Company (Conab) announced the immediate release of R$ 300 million to support rice producers in light of the sharp drop in cereal prices.
The announcement was made this Wednesday (10/22) in Porto Alegre and aims to ensure income for farmers, balance the market, and move up to 630,000 tons of rice.
The measure was brought forward due to the crisis affecting the 2025/26 grain harvest, especially in Rio Grande do Sul, the main producing state.
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Conab Brings Forward Resources and Expands Aid Mechanisms
According to Conab’s president, Edegar Pretto, the resources were originally intended for the next harvest, but the release was accelerated.
“The emergency is now. Prices have fallen below the minimum price in Rio Grande do Sul, so this budget, which was to be for next year, we will use now,” Pretto stated.
The package includes three main producer aid instruments: the Product Outflow Premium (PEP), the Equalizer Premium Paid to Rural Producers (Pepro), and Federal Government Acquisitions (AGF). Operations are expected to begin in the next two weeks.
The PEP and Pepro modalities will receive about R$ 100 million and are expected to move 500,000 tons of the cereal.
In the case of PEP, the government provides a financial incentive to industries and traders who buy rice directly from producers at the minimum price and move it out of the southern region.
The Pepro is a premium paid to farmers who prove the sale and transport of the product at a price compatible with the guaranteed minimum.
The remaining funds — R$ 200 million — will be allocated to the AGF, which allows the direct purchase of rice by public stocks.
Conab estimates to acquire up to 130,000 tons to bolster the national reserve and sustain market value.
Prices Below Cost and Risk of Reduced Planting
The government’s decision comes amid a scenario of significant devaluation of rice in the domestic market.
According to Conab, the average price paid to producers in Rio Grande do Sul is around R$ 58 per 50-kilogram sack, while the minimum price set by the government is R$ 63.64.
The president of Federarroz, Denis Dias Nunes, assesses that the fair price should be close to R$ 80 per sack, considering the current production costs.
With profitability declining, Nunes warns that planted area may decrease by up to 15% in the next harvest.
“One of the most effective measures is to reduce planting. However, the technology used in the fields should also be lower due to credit difficulties and high interest rates, which will also affect productivity,” he stated.
Lower Production and Focus on Exports
The first survey of the 2025/26 grain harvest, released by Conab last week, indicates a 5.6% reduction in the area planted with rice, totaling 1.66 million hectares.
The decline is more pronounced in dryland crops (–12.5%), while irrigated areas are expected to decrease by 3.7%
As a result, national production is expected to reach around 11.5 million tons, 10% less than the previous season.
Despite the retraction, climatic conditions are expected to be more favorable for crop development, thanks to the good availability of water in reservoirs and the forecast of heat and solar radiation in January and February.
High Stocks and Domestic Demand Challenge
Currently, national rice stocks exceed 2 million tons, while domestic consumption has remained stable for over a decade, between 10.5 and 11 million tons annually.
To balance the market, the sector is betting on increased exports.
Conab projects that external sales will exceed 2.1 million tons in 2025/26 — a gain of 31.25% compared to the previous harvest. If confirmed, the carryover stock will fall to about 1.8 million tons, sustaining the minimum price of rice above R$ 75 during the off-season.
Request for Exemption and New Emergency Measures
During the announcement, the president of Conab suggested that the government of Rio Grande do Sul exempt ICMS from operations with the cereal carried out with the new resources.
“It would be an important emergency measure; otherwise, 12% of these amounts will go to the state’s coffers instead of helping producers,” Pretto highlighted.
Meanwhile, Federarroz plans to request that part of the Cooperation and Defense Tax of Rice Cultivation (CDO) — a contribution paid by producers — be used to subsidize the outflow of production and strengthen commercialization.
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