Agribusiness out-of-court recovery requests surge 111.5% in 2025, yet actual processes remain low due to sector’s unique structure
The Brazilian agricultural sector is experiencing a significant paradox in its financial restructuring efforts, with a dramatic surge in out-of-court recovery requests for 2025 that belies a much smaller number of formal legal processes. Data from the Brazilian Observatory of Out-of-Court Recovery (Obre) reveals a record-breaking year, marking the highest volume of such filings since the 2020 reform of the Bankruptcy and Judicial Recovery Law (No. 11.101/2005) took effect. A total of 245 companies nationwide initiated out-of-court recovery procedures.
Specifically within agribusiness, 55 distinct entities—comprising both companies and individuals—sought out-of-court recovery in 2025. This figure represents a staggering 111.5% increase compared to the previous year, signaling growing financial pressures across the industry. However, despite this sharp rise in individual requests, these 55 petitions ultimately consolidated into merely 13 formal processes.
This discrepancy stems primarily from the distinctive organizational framework prevalent in Brazilian agriculture. Rural operations often involve an intricate web of interconnected physical and legal entities, a structure commonly adopted for tax optimization purposes. Juliana Biolchi, director of Obre, highlights that producers frequently operate as individuals (Pessoas Físicas – PFs) to benefit from reduced tax calculation bases.
Structural complexities inflate request numbers
Many rural businesses are characterized by family involvement and a strategic division of activities across multiple physical or legal persons. This setup, while tax-efficient, complicates the recovery landscape, as individual requests from each linked entity are filed separately even when pertaining to a single economic operation. Consequently, a single struggling agricultural enterprise might generate numerous individual recovery requests, only to consolidate into one or a few formal processes.
Biolchi explains that in recovery scenarios, the formalization of operations as a legal entity might be delayed or altogether absent for certain segments of the business. This leads to a portion of recovery petitions being filed under individual tax IDs (CPFs), which in turn diminishes the clarity and statistical visibility of these operations, making it harder to gauge the true scale of distress from raw request numbers.
Transparency challenges in segment identification
The prevalence of individual rural producers filing for recovery as physical persons also presents significant data transparency issues. Over 70% of the agribusiness recovery cases in 2025 were initiated by these individuals, whose personal data is protected under the General Data Protection Law (LGPD). This legal shield restricts detailed identification of their specific segment of activity within the broader agricultural sector.
Among the identifiable cases, approximately 17% originated from soybean producers, while 13% were linked to beef cattle farming. Other agricultural activities represented in smaller proportions included the cultivation of sugarcane, peanuts, citrus fruits, and coffee, as well as milk production and wood cultivation and extraction. This fragmented data landscape underscores the challenge in precisely mapping the sub-sectors most affected by financial difficulties.
Agribusiness’s evolving role in national recovery
Despite the notable increase in individual requests, agribusiness accounted for 17.1% of the total 76 out-of-court recovery processes recorded across all sectors in 2025. This figure positions 2025 as a peak year since the recovery law’s reform, matching the 13 cases seen in 2024. For comparison, the sector registered two cases in 2022 and three in 2023, indicating a consistent, albeit relatively modest, presence in the overall recovery landscape. As of early 2026, one new case has already been registered, pointing to ongoing trends.
Considering cumulative figures from 2021 through January 2026, other economic sectors have registered a higher number of recovery cases. Industry leads with 33.6% of all records, followed by commerce and consumption at 30.5%, and professional and financial services at 29.6%. Agribusiness holds the fourth position with 14.3% of the total, suggesting a unique resilience or a different approach to financial distress compared to other major sectors.
Concentrated credit shapes strategic decisions
The comparatively lower overall participation of agribusiness in formal recovery processes is strongly linked to the concentrated nature of credit within the sector. Biolchi emphasizes that financing for agricultural operations often involves a limited number of recurring creditors. This tight-knit financial relationship profoundly influences the strategic decisions made by businesses facing economic hardship.
Initiating a formal recovery procedure, especially a judicial one, typically entails a significant rupture in these established relationships. Creditors, particularly those with long-standing ties to the producer, are unlikely to be satisfied with such a development. Given the small pool of lenders, any strain on these relationships could have severe long-term repercussions for the producer’s access to future financing. This critical consideration often leads entities to seek less confrontational pathways.
Navigating cooperative financing and legal nuances
The concentration of credit also affects the feasibility of securing substantial discounts in recovery plans. With fewer creditors, negotiating aggressive terms becomes more challenging, often prompting applicants to opt for extrajudicial recovery as a means to achieve a less disruptive resolution. Furthermore, a substantial portion of the sector’s financing comes from credit cooperatives.
Jurisprudence is currently evolving regarding whether credit from cooperative acts can be classified as extraconcursal in judicial recovery, meaning it might not be subject to the recovery plan. This legal nuance significantly alters the dynamics of judicial processes compared to extrajudicial ones, making the latter an attractive option where cooperative credit plays a major role. The 2020 reform of the Recovery Law has increasingly positioned out-of-court recovery as a more efficient, less costly, and potentially less disruptive alternative to traditional judicial recovery, a perception that continues to broaden its utilization across various sectors, including agribusiness.
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