Rio Grande do Sul, Brazil’s southern farming heartland, is confronting a double hit from climate change: devastating floods and severe droughts that are reshaping farm livelihoods and tightening credit conditions. The May 2024 floods alone killed 185 people, affected more than 206,000 farms, damaged soils in the long term, and disrupted harvests by blocking roads and distribution centers.
This followed extreme droughts in 2020 and 2023. The state—responsible for roughly 40% of its GDP and a major producer of rice, corn, wheat, grapes and soy—has experienced more frequent and intense weather swings.
Climate shocks tighten the grip on farming in Rio Grande do Sul
The combination of deluges and droughts is not a one-off event but part of a shifting climate regime that jeopardizes yields and farm viability. Farmers are forced to cope with rapid weather swings that complicate planning and increase input costs.
In this environment, the agricultural sector faces both immediate losses and longer-term productivity risks that ripple through regional economies.
Agricultural losses and crop outlook
Yields for the state’s main crops have fallen short of expectations for five consecutive years, underscoring persistent stress from climate variability. In 2025, output of rice, corn, soy and wheat was roughly 20% below forecasts of about 39 million tonnes.
Researchers warn that future declines could be even larger in some crops, with rice productivity possibly down by 20% and soybean output down by around 10%, placing Rio Grande do Sul among the most affected areas in the country.
- Rice, soy and corn remain the linchpins of regional agriculture but are increasingly vulnerable to water stress and flood damage.
- Long-term soil degradation from repeated extreme events compounds yield shortfalls.
- Blockages to roads and distribution centers disrupt timely market access, amplifying revenue volatility.
Financial strain and debt dynamics
Beyond agronomic losses, climate shocks are fueling a debt spiral in rural areas. The droughts and floods have intensified financial stress, with rural bad debts rising sharply and credit conditions tightening at a time of high interest rates.
Farsul, the state agricultural federation, reports a dangerous combination of lower-than-expected harvests and rising leverage that threatens rural livelihoods and market stability. Smallholders, including dedicated growers like Tadeu Vodzik, report repeated crop losses and deteriorating soil health.
Some are considering relocation as farming becomes increasingly unviable. The macroeconomic backdrop—high national interest rates with the benchmark around 14.5% and ongoing volatility in energy supplies—has worsened cash-flow constraints and lending risk for farmers.
Credit conditions and risk exposure
- Rural bad debts rose about 71% to R$124 billion from July 2024 to November 2025.
- Approximately 15% of rural loans are currently under stress.
- High interest rates, coupled with shocks such as diesel shortages linked to broader geopolitical events, tighten cash flow for input purchases and loan repayments.
- These financial pressures increase the likelihood of land sales, restructuring, or relocation by farm households seeking more sustainable livelihoods.
Paths to resilience: soil technology and irrigation
Policymakers and researchers point to two interlocking strategies to reverse the current trajectory: adopt advanced soil technologies and substantially expand irrigation. Brazil’s national research system, including Embrapa and university teams, has developed soil management tools designed to restore soil health, improve water retention, and buffer crops against irregular rainfall.
Expanding irrigation—currently less than 5% of farmland—is seen as essential to stabilizing production across crops and seasons. The governor, Eduardo Leite, has pledged debt relief and a significant investment in irrigation and a structural plan to boost climate resilience after the 2024 disasters.
The plan emphasizes integrating technology, water infrastructure, and risk-sharing mechanisms to reduce vulnerability and foster more predictable harvests.
Practical steps for farmers and policymakers
- Expand irrigation coverage across additional farms and regions to reduce rain dependence and stabilize yields.
- Scale up soil-health programs that incorporate Embrapa innovations, cover crops, and soil moisture-retention practices.
- Improve access to affordable credit and targeted debt relief to prevent unviable farms from exiting production.
- Invest in rural infrastructure, including roads and storage, to minimize post-disaster losses and speed recovery after extreme events.
Here is the source article for this story: Rio Grande do Sul’s farmers battle ever more extreme weather