» Purpose

To finance the farming and non-farming activities explored upon direct employment of labor by the rural producer and his family. Non-farming activities mean the services related to rural tourism, artisanal production, familiar agribusiness, and other services provided in the rural environment, which are compatible with the nature of rural exploration and with the best employment of familiar labor. 

» Clients

Rural producers eligible under groups "C", "D" or "E" as specified ahead, certified upon Aptitude Declaration of the PRONAF (DPA), provided by agents accredited by the Ministry of Agrarian Development - MDA, and elaborated for the family production units, prevailing for all family members that reside in the same property and explore the same land areas under the regulatory terms established by MDA. The entities able to issue the DAP are those accredited with the Department of Familiar Agriculture [SAF], of the Ministry of Agrarian Development. 

Therefore, the following are eligible for support within the sphere of the Program: 

1) Family agriculturists that:

explore a plot of land in the condition of land-owner, leaseholder, tenant, partner or concessionary of the Agrarian Reform National Program;   

reside in the property or at a nearby location;

   do not have, at any title, of an area greater than four fiscal modules, quantified according to the legislation in force and, in addition, fit within the following Groups:


Group "C":

obtain at least 60% of the family income from the farming and non-farming exploitation of the establishment; 

have predominantly familiar labor in the exploitation of the establishment, making use only occasionally of wage-earning labor, according to the seasonal demands of the farming activity; 

earn an annual family gross income higher than BRL 4 thousand and up to BRL 18 thousand, excluding social benefits and the social security earnings resulting from rural activities. 


Group "D":

obtain at least 70% of the family income from the farming and non-farming exploitation of the establishment;  

  have predominantly familiar labor in the exploitation of the establishment, being allowed to maintain up to two permanent employees, being also admitted eventual resource to the help of third parties, when the seasonal nature of the activity so require; 

earn a gross annual family income higher than BRL 18 thousand and up to BRL 50 thousand, including income originated from activities developed either inside or outside the establishment by any member of the family, excluding social benefits and social security earnings related to rural activities. 


Group "E":

obtain at least 80% of the family income from the farming and non-farming exploitation of the establishment; 

have predominantly familiar labor in the exploitation of the establishment, being allowed to maintain up to two permanent employees, being also allowed to make eventual use of help from third parties, when the seasonal nature of the activity so require; 

earn a gross annual family income higher than BRL 50 thousand and up to BRL 110 thousand, including income originated from activities developed either inside or outside the establishment by any member of the family, excluding social benefits and social security earnings resulting from rural activities. 


2) Furthermore, the following are also suitable for support and fit within Groups "C", "D" or "E", according to the income earned and type of labor used:  

a) Artisan fishermen dedicated to artisanal fishing for commercial purposes, exploring the activity as independent workers, using own means of production or under a partnership regime with other equally artisanal fishermen; 

b) Extractivists dedicated to ecologically sustainable extraction exploitation; 

c) Foresters that cultivate native or exotic forests and that promote the sustainable management of those environments; 

d) Aquaculturists, mariculturers and fish breeders that: 
- are dedicated to the cultivation of organisms that have their normal or most common living environment in water; and
- explore an area that is not greater than a two hectare water surface, or occupy up to 500 m3 (five hundred cubic meters) of water, when the exploitation is carried out in a tank-net; 

e) Family agriculturalists withdrawn from Group "A" of the PRONAF or PROCERA and have an income within the established limits for those Groups, observing that:
- when dealing with borrowers withdrawn from Group "A", who have received investment financing in that Group; 
- the existence of outstanding debt in Group A operations or in PROCERA will not serve as an obstacle for the classification of the producer as a member of Groups "C", "D" and "E"; 

f) Family agriculturalists that:
- have in bovine raising, buffalo raising or in sheep and goat raising, their prevalent activity in the exploitation of the area and in the earning of an income; and
- do not have, at any title, an area greater than six fiscal modules quantified in accordance with the legislation in force; 

g) "Quilombo" communities that practice agricultural and/or non-agricultural productive activities, in addition to the processing and commercialization of their products; 

h) Indigenous populations that practice agricultural and/or non-agricultural productive activities, in addition to the processing and trading of their products; 

i) Family agriculturalists dedicated to the raising or taming of wild animals for commercial purposes, according to the legislation in force; 


» Credit Granting Forms

a) Individual: formalized with a producer for individual purposes; 

b) Collective: formalized with a group of producers for collective purposes; 

c) Group: formalized with a group of producers for individual purposes. In this case, it is necessary that producers present common characteristics of farming exploration and be spaciously concentrated. 


» Financing Lines

There are five PRONAF financing lines:

I) PRONAF Conventional

Financial support to individuals that integrate Groups "C", "D" or "E", for the performance of investments for the implementation, expansion and modernization of the production infrastructure and farming and non-farming services in the rural establishment or in nearby rural communities, in accordance with the specific projects. 

II) PRONAF Agroindustry

Financial support for the Aggregation of Income to Rural Activity destined to: 

a) Family agriculturalists, individuals fitting within Groups "C", "D" or "E"; 

b) Singular cooperatives, associations or other legal entities comprised by family of agriculturalists included in Groups "C", "D" or "E", observing that the legal entity must certify before the issuer of the DAP that, at least 90% (ninety percent) of its participants are active family agriculturalists and demonstrate, in technical project, that more than 70% (seventy percent) of the raw materials to be processed or industrialized are originated from their own production or from that of associates/partners; and 

c) Singular cooperatives, exclusively financings of projects destined to processing and industrialization of milk and its derivates, that prove to the issuer of the DAP, to have at least 70% of their active associates family agriculturists enrolled with PRONAF and, in the technical project, that at least 55% of the raw materials to be processed or industrialized are of own production or that of associates enrolled with PRONAF, upon submission of a written list showing the DAP number of each of them. 

Purposes

The credits will be destined to investments, including in infrastructure, that aim at improvement, processing and commercialization of the farming production, forestry products and extraction, or handcrafts and the exploitation of rural tourism, including: 

implementation of small and medium agroindustries, either isolated or interconnected; 

implementation of central units of management support, in cases of interconnected agroindustry projects, for quality control services to the processing, marketing, purchasing, distribution and trading of the production;

expansion, recovery, or modernization of agroindustry units of family agriculturists already installed or in operation; 

implementation, recovery, expansion or modernization of the production and infrastructure of farming and non-farming services, as well as the operationalization of these activities in the short-term, according to an specific project with approved technical, economic and financial feasibility of the entrepreneurship; 

associated working capital limited to 35% of the financing for fixed investment: 

full payment of shares linked to the project to be financed. 


III) PRONAF Women

Financial support to agriculturalist women integrating family production units eligible within Groups "C", "D" or "E", regardless of their civil status, and destined to fulfill credit proposals of agriculturist women, according to the provisions of the technical project or the credit proposal. 


IV) PRONAF Agroecology

Financial support to familiar farmers fitting Groups "C", "D" or "E", destined to investments in agroecological production systems, including the costs related to the implementation and maintenance of the project, provided that a technical proposal or project is submitted, aimed at: 

Agroecological production systems, pursuant to the rules defined by the Department of Familiar Agriculture of the Ministry of Agrarian Development; 

Organic production systems, pursuant to the rules established by the Ministry of Agriculture, Farming and Supply. 

V) PRONAF ECO

Financial support to familiar farmers fitting Groups "C", "D" or "E", destined to investment in renewable energy and environmental sustainability, provided that a proposal or technical project is submitted, for the implementation, utilization or recuperation of: 

a) Renewable energy technologies, such as the use of solar, biomass, Aeolian energy, biofuel mini plants and the replacement of fossil fuel by renewable fuel in agricultural equipment and machines;

b) Environmental technologies, as water, waste and effluent treatment, composting and recycling; 

c) Hydric storage structures, as the use of cisterns, storage dams, underground storage dams, water reservoirs and other structures for water storage, distribution, installation, connection and utilization. 

d) Small hydroenergetic utilization;

e) Silviculture, meaning the act of implementing and maintaining settlements with one or more forest species for industrial or burning purposes. 


» Financiable Items

The financiable items are those directly related to production activities or services destined to promote increases in productivity and income for producers, or production cost savings, such as: 

Construction, reform or expansion of improvements and permanent facilities; 

Soil irrigation, damming, draining, protection and recovery constructions; 

Deforestation, uprooting, forestation and reforestation; 

Development of permanent farms; 

Development or recovery of pastures;

Rural electrification and telephony;

Acquisition of new facilities, machines and equipment;

Acquisition of used machinery and equipment, bearing a guarantee certificate;

Trucks, including refrigerated, isothermal or bulk units, cargo light trucks of mixed or multiple, and rural utility vehicles, as long as they are specifically aimed at farming activities. Therefore, it is not allowed the financing of passenger vehicles, classified by type or finish. Within PRONAF Agroindustry the credit destined to utility vehicles is limited to 50% of the good acquisition value; 

Recovery or reform of machines and equipment; 

In projects for the implementation of permanent farms, expenses with cultivation treatments (fertilizers, manures, soil correctives, etc.) until the first harvest in commercial scale, as long as the expenses for farm implementation are also being financed; 

In cattle raising, expenses that are traditionally considered as costing, such as the acquisition of larva, post-larva, one-day chicks and animal food, as long as they take place until the first harvest in commercial scale and that other project implementation expenses are being financed; 

Costs or working capital related to the investment within PRONAF Conventional, PRONAF Agroindustry and PRONAF Women, limited to 35% of the project or proposal value; 

Expenses with Technical Assistance and Rural Expansion [ATER] up to 2% per year of the annual outstanding balance of the financing; and 

Acquisition of information technology equipment and software aimed at rural and/or agroindustrial unit ventures, upon indication in a technical project. 


» Interest Rate (including spreads to accredited financial institution)

Groups "C" and "D": 2% per year 

Group "E": 5.5% per year

These rates already include spreads to accredited financial institution. 

Additional Bonus:
Within PRONAF Conventional, the operations performed with Group "C" participants a Performance Bonus of BRL 700 per borrower shall be applied, proportionally distributed, on each installment of the financing paid up to its respective due date and applicable exclusively on the first and second credit operations contracted by the producer. 

Within PRONAF Women, the operations performed with Group "C" a Performance Bonus of BRL 700 per borrower shall be applied, proportionally distributed, on each installment of the financing paid up to its respective due date. 

The credit borrower shall lose the right to such bonus in relation to the debt installment which is not paid until the date of its respective maturity. 


» Share Level
Up to 100%


» Maturity

The grace and amortization periods are established according to the client payment capacity, compatible with the financial return of the financed venture, as defined in the technical project or simplified proposal, respecting the following provisions: 

Total: 
- Up to 12 years, under PRONAF ECO, in operations contracted for silviculture; or 
- Up to 10 years, for acquisition of tractors and new agricultural implements, when the assisted activity requires this term and the technical project or credit proposal proves its need; or 
- Up to 8 years, in other cases.

Grace Period:
- Up to 8 years, within PRONAF ECO, in operations contracted for silviculture; or 
- Up to 5 years, when the assisted activity requires this term and the technical project or credit proposal proves its need; or 
- Up to 3 years, for the acquisition of tractors and new agricultural implements, within PRONAF Agroecology and in the other cases. 


» Amortization

The date of the first amortization and the principal payment frequency shall be defined by the accredited financial institution, according to the flow of incoming resources from the benefited property. 

The frequency of the principal payment may be monthly, quarterly, half-yearly or annually. 

During the grace period, there will be no interest rate payments, which will be capitalized in the same payment frequency of the principal as agreed upon, except for operations with MONTHLY frequency, which interest rates shall be capitalized on a quarterly basis. During the amortization phase, interest rates will be paid together with the principal. 
 


Financing Limits

I) PRONAF Conventional

PRONAF Conventional financings shall be subject to the following limits: 

Group "C": minimum of BRL 1.5 thousand and maximum of BRL 6 thousand per operation, each borrower being allowed to obtain up to three credits, either consecutive or not, within the whole National System of Rural Credit [SNCR];
 
Group "D": maximum of BRL 18 thousand per borrower. 

Group "E" : maximum of BRL 36 thousand per borrower. 

The limits of financing amounts destined to borrowers within Groups "C", "D" or "E" may be increased by up to 50% as long as the technical project or credit proposal proves the increase of income or cost saving, and that the funds are destined to: 

1. bovine raising for cut meat or milking, buffalo raising, shrimp raising, fish raising, horticulture, vegetable raising and sheep and goat raising, as well as to hydric infrastructure projects, including activities related to irrigation projects and other productive structures aimed at providing hydric security to the entrepreneurship; 

2. aviculture and swine raising outside of partnership or integration regimes with agroindustries; 

3. agroecological production systems, in accordance with the norms determined by the Family Agriculture Office of the Ministry of Agrarian Development; 

4. organic production systems, in accordance with the norms established by the Ministry of Agriculture, Cattle Raising and Supply; 

5. activities related to rural tourism; 

6. acquisition of machines, tractors and agricultural accessories, utility vehicles, vessels, irrigation equipment, storage equipment and other assets of this nature that are specifically destined to farming, except for passenger vehicles; and

7. implementation, utilization and/or recuperation of renewable energy, environmental and hydric storage technologies, small hydroenergetic and silviculture projects. 

II) PRONAF Agroindustry

PRONAF Agroindustry financings shall be subject to the following limits: 

Individuals - Individual or Group Credit: maximum of BRL 18 thousand, per borrower, applicable to one or more operations; 

Individuals (Collective Credit) or Legal Entities: according to the technical project and venture economic-financial feasibility study, observing the individual limit of BRL 18 thousand per partner/associate/member of the cooperative as listed on the DAP issued for the agroindustry; 

Up to 30% of the amount financed for investment in the production of the farm which is the object of the improvement, processing or commercialization; 

Up to 15% of the amount financed for each agroindustrial unit may be applied to the central management support unit, in case of projects of network agroindustries or, in case of stand-alone agroindustries, for payment of services such as accounting, product development, quality control, management and financial technical assistance. 


III) PRONAF Women

Within the PRONAF Women, only one financing may be granted to the familiar unit across the whole SNCR, observing the following limits:

Group "C": minimum of BRL 1.5 thousand and maximum of BRL 6 thousand; 

Group "D": maximum of BRL 18 thousand; and 

Group "E": maximum of BRL 36 thousand. 


IV) PRONAF Agroecology

PRONAF Agroecology financings are subject to the following limits:

Individual Credit - Group "C": maximum of BRL 6 thousand per borrower ; 

Individual Credit - Group "D": maximum of BRL18 thousand per borrower ;

Individual Credit - Group "E": maximum of BRL36 thousand per borrower; and 

Collective or Group Credit: according to the technical project and venture technical, economic and financial feasibility study, observing the individual limit per borrower. 

Note. The same family unit may contract up to two consecutive loans, but the second one shall only be granted after payment of at least one installment of the first operation and upon submission of a technical assistance report attesting the regular situation of the financed venture. 

V) PRONAF ECO

PRONAF ECO financings are subject to the following limits: 

Individual Credit- Group "C": maximum of BRL 6 thousand per borrower; 

Individual Credit- Group "D": maximum of BRL18 thousand per borrower;

Individual Credit- Group "E": maximum of BRL36 thousand per borrower; and 

Collective or Group Credit: according to the technical project and venture technical, economic and financial feasibility study, observing the individual limit per borrower.

Note. The same family unit may contract up to two consecutive loans, but the second one shall only be granted after payment of at least three installments of the first operation and upon submission of a technical assistance report attesting the regular situation of the financed venture. 


» Collaterals

The guarantees will be defined by free agreement between the accredited financial institutions and the borrower, having to be adjusted in accordance with the nature and tenure of the credit pursuant to the pertinent norms of the Brazilian Central Bank. 

The pledge of credit rights resulting from financial investments will not be accepted as a guarantee. 


» Effectiveness

Until 06.30.2008, respecting budget limits.

- For contracts up to 06.30.2008, financing applications must be filed in BNDES, for approval, up to 06.19.2008; and

- The operations sent after contracting may be filed in BNDES, for approval, up to 07.18.2008.

Obs.: Program with effectiveness time expired. Its continuity, with eventual alterations, is being studied by BNDES.


» Addressing

The interested party must head to the accredited financial institution of its choice to obtain information about the documentation necessary to negotiate the operation, which shall be analyzed with basis on a technical project to be presented, further to the Ability Declaration to PRONAF - DAP, provided by the agent accredited by the Ministry of Agrarian Development - MDA.