Given the economic changes and the challenges posed by climate conditions and market fluctuations, it is understandable that rural producers turn to debt extension as a strategy to reorganize their finances and overcome difficulties. When used responsibly and in accordance with legal criteria, this mechanism plays an essential role in preserving agricultural activities and promoting the sustainability of the agribusiness sector.
On the other hand, the indiscriminate use of debt extension rules undermines legal certainty, distorts rural credit, and increases systemic risk in the financial sector.
Financial institutions engaged in rural credit have been facing a growing wave of lawsuits from rural producers seeking debt extensions. Generic claims of crop failure or financial hardship have often been used as grounds for requests for compulsory contract extensions, frequently based on a misinterpretation of Supreme Court Precedent No. 298 of the STJ (Brazilian Superior Court of Justice).
It is necessary to reestablish the legal and technical boundaries of this issue. Precedent 298, which states that the extension of rural credit debt “is not a prerogative of the financial institution, but a right of the debtor”, is based on a regulatory framework that is no longer in effect.
This Precedent was built upon Law No. 9,138/95, which deals exclusively with operations contracted up to June 20, 1995, and therefore no longer provides a valid legal basis for its application to contracts entered into in recent decades.
Since the issuance of CMN Resolution No. 4,905/2021[1], the Rural Credit Manual[2] (MCR 2.6.4) has established that financial institutions “are authorized” to extend debt—no longer obligated to do so.
This means that approval of the request is subject to the technical and discretionary assessment of the financial institution, based on objective criteria, such as: (i) timely submission of the request, made before the contract’s maturity date; (ii) submission of an independent technical report proving crop failure or adverse events; (iii) clear demonstration of future payment capacity, through a detailed repayment schedule; and (iv) an assessment by the institution of the economic feasibility of the extension.
It should be clarified that when strict criteria are not applied to debt extensions, financial institutions tend to become more cautious in granting new loans. This can hinder access to rural financing, especially penalizing compliant producers who depend on such credit to invest in the next harvest.
Therefore, it is not sufficient for the rural producer to merely claim losses or submit unilateral reports and documents produced solely for litigation purposes.
Extensions are neither automatic nor universal, they presuppose the existence of a contract that is formally classified under the National Rural Credit System, with allocated resources and proven application.
Only contracts that are formally classified as rural credit are eligible to benefit from the rules set forth in the Rural Credit Manual (MCR). Credit instruments contracted by rural producers but not linked to the official rural credit system are not subject to these regulations.
Lawsuits attempting to apply rural credit rules to transactions that do not meet legal requirements represent a clear deviation from contractual intent. Such claims distort the logic of the signed contracts and undermine legal certainty, creating imbalances that weaken the structure of the rural credit system.
While there are legitimate and necessary mechanisms for debt renegotiation to address adversity, it is essential that such mechanisms be used responsibly and in compliance with technical and legal criteria. When exceptions are granted without technical justification, the rural credit system is weakened: compliant borrowers are penalized, confidence in financial institutions erodes, and access to credit for future harvests becomes more difficult.
Legal certainty and the economic and financial balance of the rural credit system depend on adherence to agreed rules. The indiscriminate relaxation of extension criteria undermines responsible lending, penalizes borrowers who are up to date, and compromises the sustainability of financial operations.
In this context, the Brazilian Superior Court of Justice (STJ) has consistently reaffirmed this understanding. In its ruling on AgInt in AREsp 2.426.163/MG, the Court reiterated that “although the extension of rural credit debt is a right of the debtor under Law 9,138/95, it is subject to compliance with legal requirements.”
In that particular case, the Court concluded that merely achieving lower-than-expected productivity was insufficient to demonstrate an inability to pay. Moreover, the decision highlighted that the request failed to meet the requirement for prior administrative submission, a condition essential for the financial institution to evaluate the feasibility of granting the extension.
This is not about denying support to rural producers in vulnerable situations. On the contrary, it is undeniable that agribusiness is exposed to inherent risks, such as market fluctuations and adverse weather events, and that mechanisms to mitigate these impacts are legitimate and necessary. However, such mechanisms must comply with minimum legal and technical standards to avoid imbalances in the rural credit system and preserve its long-term sustainability.
Justice must not become a tool to arbitrate unilateral expectations. Therefore, compliance with regulations, contractual good faith, and reliable evidence of need are non-negotiable prerequisites for any rural debt extension request.
Fernanda Regina Negro and Renata Nicodemos
[1]https://www.bcb.gov.br/estabilidadefinanceira/exibenormativo?tipo=Resolu%C3%A7%C3%A3o%20CMN&numero=4905
[2] https://www3.bcb.gov.br/mcr/completo
Autor: Renata de Cássia Moraes Nicodemos • email: renata.nicodemos@ernestoborges.com.br • Tel.: +55 67 99234 3888
