Brazil has created a federal task force to assess the impacts of a potentially very strong El Niño on its 2026/27 crop season, even as key risk‑management budgets for farmers have been sharply constrained, a combination that could ripple through global agricultural markets watched closely by coffee buyers.
On 30 June 2026, Minister of Agriculture and Pecuária André de Paula signed a decree at the Palácio do Planalto in Brasília establishing a federal working group to evaluate El Niño impacts and propose mitigation, adaptation and protection measures for the 2026/27 harvest, according to the Ministry of Agriculture and Pecuária and reports from Valor International and Globo Rural. The measure was published in Brazil’s official gazette, the Diário Oficial da União, on 1 July, giving the task force 60 days, extendable by 30, to deliver a diagnosis and action plan.
The new group is being formed against the backdrop of converging climate assessments. A multi‑agency bulletin from the National Institute of Meteorology (INMET) on 29 June, cited by Valor International, indicates more than a 90% probability that El Niño conditions will persist until at least early 2027, with a high likelihood of reaching “very strong” intensity, defined as sea surface temperature anomalies above 2.0°C. INMET’s seasonal outlook, reported by Globo Rural, projects above‑average rainfall for southern Brazil and below‑average rainfall for central‑northern regions during July–September 2026, alongside a high probability of elevated temperatures, heatwaves and wildfires in the second half of the year.
Speaking after presenting Brazil’s Family Agriculture Crop Plan, André de Paula said that “climate-related challenges will be severe” and that “technical and scientific information indicates El Niño will cause problems,” adding that authorities will have to keep monitoring developments, according to Valor International. The U.S. Climate Prediction Center, cited by farmdoc daily, expects El Niño conditions to strengthen into the Northern Hemisphere winter of 2026/27, while the European Commission’s Joint Research Centre has described the episode as potentially historic, with expected agricultural impacts across Sub-Saharan Africa, India, China, Australia and Brazil.
At the same time, Brazil is tightening financial tools designed to cushion farmers from extreme weather. An anonymous source at the Ministry of Agriculture told Valor International that the federal subsidy for rural insurance under the Programa de Subvenção ao Prêmio do Seguro Rural has been cut to R$473.8 million, less than half its original allocation. The same source warned that a shortage of insurance funding could discourage farmers from planting, leading to lower production and higher food prices.
Alongside commercial insurance, Brazil relies on the public Proagro program to protect producers against climate and other losses. According to a January 2026 article on oempallador.com.br, which cites the Central Bank, Proagro’s budget for 2026 was set at R$6.6 billion, backed by the federal budget and additional fees. New rules now impose automatic controls: when 80% of the budget is committed, coverage is blocked for municipalities representing 25% of risk; at 90%, the block extends to 50% of risk; and if spending exceeds the budget, new coverage is fully suspended, with the Central Bank monitoring commitments every 15 days.
These controls follow a sharp expansion in payouts. Valor International reported that during the 2025/26 crop season, Proagro approved R$3 billion in compensation across 71,000 loss claims, of which R$1.5 billion was charged to the 2026 budget, and noted that the total amount insured under Proagro in that cycle reached R$12.8 billion. Separately, oempallador.com.br stated that Proagro’s initial forecast for 2023 was R$2.7 billion, but actual spending reached R$9.4 billion, prompting a series of seven adjustments that the Central Bank says saved R$801 million in the second half of 2024 and R$1.8 billion in the first half of 2025.
Despite the insurance squeeze, the government is expanding credit lines. Valor International reports that the 2026/27 Family Agriculture Crop Plan (Plano Safra da Agricultura Familiar) allocates over R$97 billion, while the commercial Plano Safra totals R$525.1 billion. The Ministry of Agrarian Development and Family Agriculture (MDA) says that between 2023 and 2026, family agriculture credit made available through Pronaf reached R$225.8 billion, with 6.2 million operations and R$210.6 billion actually contracted, representing increases of 33% in the number of operations and 95% in the volume of credit compared with the previous administration.
For smaller producers, including those in coffee‑growing regions, access to this credit is being framed as a key inclusion tool. At the launch of the 2026/27 family agriculture plan in Fortaleza, MDA minister Fernanda Machiaveli said, in Portuguese, that Plano Safra is “one of the largest instruments of productive inclusion” in Brazil and that expanded eligibility will allow families that previously earned up to R$60,000 per year to obtain loans at levels she described as capable of transforming their lives, according to an official MDA release.
Within the same program, the MDA has announced increases in Pronaf B microcredit limits to R$28,000 for women and R$16,000 for youth, plus home renovation credit of up to R$10,000 with a 40% discount for on‑time payment, measures intended to support family farmers’ resilience. The MDA release also highlights that federal public purchases via the Contrata+Brasil system totaled R$3.65 billion through food acquisition and school feeding programs, of which R$1.7 billion corresponded to the MDA’s share, and notes that the minimum share of school feeding purchases from family farming has been raised to 45%.
Officials involved in managing these protections acknowledge that climate pressure is intensifying. “The pressure from adverse weather events has increased, and it’s here to stay. We have to learn to live with it,” said José Henrique da Silva, director of financing, protection and support for family productive inclusion at the MDA, during a press conference on the family agriculture plan, as reported by Valor International. He added that the ministry does not believe Proagro’s budget will be exhausted and sees a “comfortable cushion,” while emphasizing the need for continuous monitoring.
For global buyers of Brazilian coffee and other agricultural commodities, the combination of a forecast very strong El Niño, stricter Proagro caps and reduced rural insurance subsidies is unfolding in a sector that farmdoc daily characterizes as facing low commodity prices, high fertilizer costs, tight credit, high interest rates and rising farm debt, with producer margins described as near breakeven.
Beyond Brazil, the JRC notes that the developing El Niño is expected to affect agriculture in several key producing regions and that global food prices are likely to be pushed in different directions, including sharply higher durum wheat prices and a slight increase in maize prices, underscoring how Brazil’s effort to balance expanded farm credit, constrained insurance tools and a new El Niño task force will be closely watched by international agricultural markets.
