In Mato Grosso, Brazil’s key state for soyabean production, banks are repossessing farm machinery while credit for fertiliser and other inputs has dried up. Some farmers are selling land or tractors to pay debts, while the government is trying to extend the terms of loans to ease pressure on farmers.
Elsewhere in Brazil, finance is so tight that Bayer, a large European chemical company, is accepting grain as payment for agrochemicals as a way to stave off a slowdown in sales as farmers struggle to obtain bank loans to raise cash.
The sugar sector is emblematic of the overall debt problem, but experts say the sector also serves as an indicator that, through consolidation, Brazil’s agriculture industry could emerge stronger from the crisis.