Uruguay: Government on alert over agricultural debt overhang and rising default rates

Published Mar 22, 2025

Tridge summary

The Uruguayan agricultural sector is facing a warning sign due to a significant increase in debt to banks, now at $3.5 billion, up from $2.5 billion in two years. This increase is attributed to drought and exchange rate fluctuations. The Minister of Livestock, Agriculture, and Fisheries, Alfredo Fratti, has highlighted the need to address this over-indebtedness to prevent it from worsening. Fratti differentiates between debt that drives production and investment and debt that leads to over-indebtedness, which impedes production and requires the sale of fixed assets for payment.

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Original content

The government has turned on a warning sign for the agricultural sector due to the over-indebtedness the sector is experiencing, with debts to banks increasing by $1 billion in just two years. Drought and other factors such as the exchange rate are believed to be the main causes of a phenomenon that authorities are beginning to pay attention to. The Minister of Livestock, Agriculture, and Fisheries (MGAP), Alfredo Fratti, warned about the current debt overhang in the agricultural sector, especially in certain areas, and the need to address it to prevent the problem from worsening further. Learn more “The data I have is that from 2022 to 2024, the agricultural sector went from $2.5 billion in debt to banks to $3.5 billion,” Fratti said in an interview with Informativo Uruguay, adding that “we need to turn on a warning.” “This obviously includes periods of drought, but I think there are also other factors that probably had to do with the exchange rate, which caused debt to grow by ...

Source: Agromeat