The global financial crisis may have caused short term suffering for some Brazilian farmers, but it could prove beneficial in the long run if it leads to much needed change in the country's outdated credit and environmental sectors.

Brazil's Agricultural minister Reinhold Stephanes has said the government is studying a new credit model for the agricultural sector which will include a program of minimum prices, crop insurance and financing, putting the country on a par with other producing nations.

In the past there has been a heavy reliance on private trading companies and input suppliers to finance planting, especially of soybeans. This saw many farmers getting caught up in a vicious cycle where it seemed they were working purely for the trading companies.

This year the situation changed dramatically with companies like Bunge and Cargill reducing the amount of financing they made available to farmers and as a result most had to look for new credit channels, especially with private and public banks.

This worked this year, as most farmers had already secured financing before the crux of the crisis in September. Next year could be a different story, however, as many farmers have been unable to keep up with bank payments in recent months.

As a result the government is now looking at a new financing model for next year's crop to avoid a drop in production.

According to Stephanes, the country also needs to reform its environmental laws, which no longer serve to protect forests or help farmers. He added that if the current forest code, which was written over forty years ago, was fully enforced it would put at least one million small to medium sized farmers out of business.

This may be just idle politician talk, but if Brazil did manage to reform its credit and environmental laws it could change the face of farming in Brazil.

Lack of credit and environmental pressures, along with poor infrastructure, have been the main limiting factors to Brazil's agricultural growth over recent years.

Solving two out of the three could go a long way to boosting the country's agricultural expansion in coming years.