The Brazilian agribusiness sector is going through one of its most difficult periods in recent years. According to Serasa Experian, requests for judicial reorganization (bankruptcy protection) within the agricultural sector reached 1,990 in 2025—a record high for the survey—and continued to climb in 2026, with 474 such requests filed in the first quarter alone, an increase of approximately 22% compared to the same quarter in 2025. Yet, Investment Funds for Agribusiness Production Chains (known as “Fiagros”) have never attracted more interest. According to the Brazilian Association of Financial and Capital Markets Entities (Anbima), offerings for these funds totaled R$ 8.3 billion in the first half of 2026—nearly four times the amount recorded during the same period the previous year. While these two trends may appear contradictory, regulatory changes and the credit crisis itself help explain this relationship.
Established by Law No. 14.130/2021, Fiagros were initially regulated by the Brazilian Securities and Exchange Commission (CVM) on an experimental basis. In the absence of specific rules, these funds were required to follow the regulations applicable to real estate investment funds, credit rights investment funds, or private equity funds—depending on the category in which they were registered—and were restricted to the assets permitted for that specific category. This landscape shifted with CVM Resolution No. 214, issued on September 30, 2024, which has been in effect since March 3, 2025. This regulation brought the experimental phase to an end by incorporating an annex dedicated exclusively to Fiagros into CVM Resolution No. 175—the overarching regulatory framework for investment funds. This annex outlines, among other things, the permitted assets, the governance rules applicable to these assets, and the information that must be disclosed to unitholders. With its own specific set of rules, the Fiagro (Agribusiness Investment Fund) now offers greater predictability for those who structure, invest in, or seek financing through this vehicle.
The primary change concerns the composition of the portfolio. A single class of units can encompass rural real estate, equity stakes in companies within the agribusiness supply chain, financial instruments such as Rural Product Notes (CPRs) and Agribusiness Receivables Certificates (CRAs) and, as a new addition, agribusiness-related carbon credits and decarbonization credits (CBIOs). In this context, the market has begun using the term “multimarket Fiagro” to refer to funds that invest simultaneously across different markets. This does not represent a new, distinct category; rather, it describes a fund that might, for instance, hold rural real estate, finance crop harvests, and maintain an equity stake in an agribusiness company. This structure allows the fund manager to adjust the portfolio in line with the agribusiness cycle without the need to create an entirely new fund. Conversely, if the investment policy permits allocating more than half of the fund’s assets into instruments typical of a different fund category, that class must also comply—on a supplementary basis—with the rules governing that other category.
The current state of the agribusiness sector helps explain why this flexibility has seen such high demand. Faced with rising costs and mounting debt, producers and companies have seen their repayment capacity diminish, while banks have become more selective in granting credit. At Banco do Brasil—the sector’s primary lender—the default rate within its agribusiness portfolio nearly doubled over the course of a year. Consequently, the capital market has begun to fill some of the void left by banks, and the Fiagro has gained significant relevance within this shift. For producers, cooperatives, and companies within the agribusiness supply chain, Fiagro (Investment Funds for Agribusiness Chains) represents an alternative to traditional bank credit. It offers terms aligned with the crop cycle and allows for the sale of land to the fund without interrupting production, as the land can be leased back. Banks themselves have also begun to turn to Fiagro in search of greater capital efficiency. Credit granted using funds from the so called Letras de Crédito do Agronegócio (LCAs—Agribusiness Credit Notes) remains on a bank’s balance sheet and requires the bank to hold its own capital against it; in contrast, with Fiagro, the credit exposures are transferred to the fund, shifting the majority of the risk to the fund’s shareholders (unitholders). According to the Ministry of Agriculture, as of August 2026, the outstanding volume of the so called Cédulas de Produto Rural (CPRs)—one of the assets that can make up a Fiagro portfolio—had already surpassed that of LCAs, a reversal of the ratio that existed just a few months earlier.
From an investor’s perspective, a degree of security is provided by “subordination,” a feature adopted in many new offerings. In this model, the subordinated class of shares (or units) only receives payouts after other investors have been paid, and it is the first to absorb any potential losses. These funds also offer professional management, diversification, and the protections established under CVM Resolution No. 175—such as the segregation of assets between different classes of shares and the ability to limit an investor’s liability to the amount invested. Taxation, a common source of uncertainty, is another attractive feature: as a general rule, income distributed to individual investors is exempt from income tax, provided that all legal requirements are met.
However, this growth warrants attention to a few key points. The first is liquidity; a significant portion of these new offerings consists of funds traded over-the-counter (OTC), and not on a stock exchange. Although their shares may appear less volatile to investors, they are more difficult to sell before the end of their term. A second consideration is the choice of credit instrument, which has gained significance as the number of judicial reorganization (bankruptcy protection) cases has risen. Credit instruments linked to a Cédula de Produto Rural (CPR—Rural Product Note) with physical settlement – such as those involving price prepayments or exchanges for agricultural inputs (barter) – are not subject to the effects of a debtor’s judicial reorganization. A third point concerns Fiagros that invest in land. In April 2026, the Supreme Federal Court (STF) confirmed that Brazilian companies controlled by foreign capital are subject to the same restrictions on the purchase of rural real estate as those imposed on foreign individuals or entities under Law No. 5.709/1971; this law stipulates that any acquisition made in violation of its rules is null and void. For Fiagros with a significant proportion of foreign investors, it is advisable to carefully review any ongoing or planned land acquisitions.
The crisis in the agricultural sector and the record-breaking performance of the market are, therefore, not contradictory trends. The contraction in bank credit has created an opening for the capital markets, while CVM Resolution No. 214 has provided Fiagros with their own specific regulatory framework and the flexibility to occupy that space. Because this initial cycle under the new regulation coincides with one of the most precarious periods for rural credit, it also serves as a stress test for the model. Moving forward, what will likely distinguish one fund from another is the quality of its structure—specifically regarding the assets selected, the collateral in place, and the composition of its investor base.
By Bruna de Almeida Lins, an attorney at Candido Martins Cukier.
