Producers seek accessible and flexible financing alternatives, says company.
The agricultural consortia sector in Brazil is expanding rapidly, with Rodobens, a company active in the automotive, financial, and real estate industries, reporting an 18% increase in its agribusiness consortia during the first half of 2024.
In addition to the consortia share growth, the company also saw a 27% rise in truck credit demand during the first six months of the year compared to the same period in 2023.
“Consortia are proving to be an essential financial tool in agribusiness, increasingly attracting farmers who need accessible and flexible financing options,” said Sebastião Cirelli, Consortia Director at Rodobens.
According to the Brazilian Association of Consortium Administrators (ABAC), credit volumes for heavy vehicles and agricultural machinery alone rose by about 20% in 2023 compared to the previous year. Additionally, rural property consortia also saw increased interest, especially for land acquisition and infrastructure, as well as for diverse assets such as irrigation systems, storage silos, and other modernization items, according to a market note from the group.
Regional demand in Brazil reflects specific needs, as noted by the company. In the Central-West, Mato Grosso and Goiás are leaders in tractor and harvester purchases. The South has a strong focus on machinery and rural infrastructure, while São Paulo and Minas Gerais in the Southeast invest in agricultural equipment, land, and processing machinery. In the Northeast, Bahia and Maranhão lead in irrigation and machinery consortia, while Pará and Tocantins in the North focus on agricultural equipment.
Currently, the Southeast region represents the largest portion of Rodobens’ clientele, accounting for 38.8% of the total, with 28.8% of clients based in São Paulo, Cirelli detailed.
Trends
According to a Rodobens survey, agricultural consortia are showing some emerging trends, such as digitalization, customized plans adapted to producers’ specific needs, and an expansion into infrastructure and agricultural supplies. Among the highlights are “green and sustainable” consortia.
“ESG practices are having a growing impact on agribusiness consortia, as both producers and administrators look to align operations with sustainability, social responsibility, and good governance principles,” explained Cirelli.
These consortia are designed for producers interested in investing in agricultural practices integrated with sustainable management models, encompassing energy transitions, eco-friendly irrigation systems, and lower-impact machinery. “Furthermore, public policies and government incentives targeting sustainability are also fueling this market,” the director noted.
Cirelli added that consortia for sustainable technology and equipment are drawing in producers by offering alternative products to support investment in innovative solutions.
