International Journal of Advanced Engineering Research and Science (IJAERS) [Vol-7, Issue-6, Jun- 2020] https://dx.doi.org/10.22161/ijaers.76.14 ISSN: 2349-6495(P) | 2456-1908(O) www.ijaers.com Page | 107 Capitalization and Financing of Brazilian Agricultural Cooperatives Régio Marcio Toesca Gimenes Agribusiness Postgraduate Program, FACE, Federal University of Grande Dourados, Brazil Abstract— The new scenario of the world economy presents itself to cooperative societies in the form of a permanent contradiction, that is, to remain a competitive company, capable of facing large multinationals that conquer their markets and, at the same time, meet the needs of its members, not always being able to do it with any result.This contradiction imposes limits on the financing of its expansion process with its own resources (self-financing), especially in developing economies, where the capital factor is generally scarce and expensive, and its need is apparently infinite. There is a consensus that the development of the capital market can supply this shortage of long-term private credit, just look at the international experience, in which this market captures the necessary resources to finance the expansion process of companies, promoting gains in competitiveness. and productivity across the economic system.The potential of the capital market to assume this role depends on the growth of voluntary institutional savings (investment funds, pension funds and open pension funds), as well as the persistent reduction in the interest rate on government bonds that will be possible, if there is a clear government intention to consolidate the long-term fiscal adjustment, reducing the vulnerability of the Brazilian economy to international financial capital.The expectation regarding the strengthening of this market is what justifies the proposal of this research, given the scarcity of credit permeating all the decisions of the agricultural cooperatives, when, from a certain stage of their growth process, a new relationship between own and third party resources, which, in some cases, compromises their financial balance. Keywords— Agricultural cooperatives; Capitalization, Financing, Structure of capital; Rural development. I. INTRODUCTION In order to resist and grow, cooperative or non- cooperative companies need to guarantee good economic performance through differentiating strategies and competent management of their businesses, acting with competitive advantage in international markets. A new stance in relation to their strategic positioning and organizational architecture are actions that aim to increase the competitiveness of these organizations and are usually accompanied by investments and require additional resources. The reduction of financial resources offered by the Brazilian Federal Government to rural producers and their cooperatives for the cost, investment and commercialization of their products, is evidence of the depletion of traditional sources of financing for national agribusiness. In reality, this reduction is the result of transformations that the Brazilian economy underwent due to its high fiscal deficit, which reduced the investment capacity of the public sector, forcing the government to finance itself in the private sector, and thus redirecting the private savings for the acquisition of public bonds, to the detriment of financing productive activities.To supply the demand for rural credit, agricultural cooperatives began to act as banks, providing resources for rural producers who were unable to capture them in the financial market. As the cooperatives did not have their own resources to make these loans to producers, they did so using financial institutions, and therefore ended up assuming the credit risk. If at the time of the harvest, in the event of crop frustration, the producer did not honor its obligations to the cooperative, it could face financial difficulties due to the mismatch between the liquidity of its assets and the liabilities assumed on behalf of the cooperative members, which in fact occurred In so many cases.Among the main issues that are currently being debated in thecooperative movement, he most important,