Rural credit in Brazil: contrat's evolution at an institutional approach

• Main Authors: Luciana Florêncio de Almeida, Décio Zylbersztajn
• Format: Article
• Language: English
• Published: Escola Superior de Propaganda e Marketing - ESPM 2009-03-01
• Series: Internext: Revista Eletrônica de Negócios Internacionais
• Subjects: instituições; contratos; crédito agrícola.
• Online Access: https://internext.espm.br/internext/article/view/77

This article outlines a New Institutional Economics’ approach of rural credit. The mainstream relies in the understanding that the rural credit contracts are hybrid forms in response to the agrichain´s complexity. The object of the research was operational credit contract for soybeans farms. The research consisted on qualitative researches in the extent that they sought to comprehend in a more profound level the rules of game for the rural financing contracting environment based on the economic agent’s perceptions. The results highlighted the agent’s perception that the judicial system is not strong enough to performance an efficient enforcement of the contracts. In response to this institutional challenge, the agents and the government manage adaptations in the contracts, which has been successful in the agent’s point of view. In the other hand, the informational system has showed weaknesses in protecting the creditor’s right. This scenario open breaches to opportunist actions and adverse selection. In order to mitigate these problems the agents govern interdependent transactions as a tool for risk sharing.