(Bloomberg) -- President Luiz Inacio Lula da Silva proposed exempting emergency spending from Brazil’s fiscal rules as his government raced to respond to devastating floods in the southern part of the country.

“We are going to do everything in our power so that we can contribute to the recovery of the state of Rio Grande do Sul, improving people’s lives and facilitating what we can facilitate,” Lula said Monday afternoon in Brasilia, where he unveiled the plan in the form of a presidential decree that still needs approval from Congress.

The leftist president traveled to Rio Grande do Sul alongside congressional leaders and members of his cabinet on Sunday to survey the floods that have left at least 83 people dead. The damage has extended to key products like rice, poultry, pork and soy in a region that serves as one of Brazil’s agricultural powerhouses, causing concerns of crop losses and food shortages in the area.

Planning Minister Simone Tebet told reporters that the government could not estimate the overall spending need for the flood response, but that it would maintain its fiscal target for 2024.

Earlier on Monday, the crisis caused swap rates to rise amid worries “about the possible inflationary impact it could generate,” said Daniel Leal, a fixed income strategist at the brokerage BGC Liquidez. 

The rampant floods are expected to dent rice and soy harvests that are each only about 80% complete. Datagro, a Sao Paulo-based agricultural consultancy, forecasts that the state will lose 600,000 to 700,000 tons in rice — about 8% to 9% of its annual production forecast — and 1% of Brazil’s estimated soy production. 

“So far, the effect of the flooding was concentrated in rice prices that jumped 5% in the last seven days,” JPMorgan Chase & Co analysts said in a note, adding that the overall inflation risks of the flooding are likely to be “modest.”

Ten meatpacking plants in the state suspended operations, according to ABPA, which represents the poultry and pork industries. BRF SA, the country’s biggest poultry producer, said in text message Monday that four of its five plants in Rio Grande do Sul have resumed operations, with the fifth likely to reopen Tuesday.

“With the temporary shutdown of plants that account for most of the state’s chicken and pork production, there are fears that the population of Rio Grande do Sul will face a shortage of products until the production system is restored, which could take more than 30 days,” ABPA said in a Monday statement. 

The agriculture ministry said last week that the government will allow farmers affected by climate events to renegotiate loan debts related to investment credit lines with Brazil’s national development bank, a benefit it typically only offers at the end of the harvest season.

The large volume of rain that caused the floods in southern Brazil resulted from an atmospheric blockage in the central region of the country and a mass of polar air that came from Argentina and Uruguay, all in addition to El Ninõ, which naturally increases the amount of precipitation in the region, said Marco Antonio dos Santos, an agrometeorologist at Rural Clima.

Read More: Lula Visits Southern Brazil With Dozens Missing in Floods

The city of Santa Maria, one of at least 364 municipalities affected by flooding in Rio Grande do Sul, received 408 millimeters (16.1 inches) of rain in April, roughly three times the average of 151.1 millimeters for the month.

The death toll from the floods continues to rise each day and more than 111 people are still missing, according to the state’s civil defense department. Another 20,000 are in shelters and a total of 129,279 are displaced. The impact on both the population and the state’s agricultural industry may only grow larger in the coming days, with rains forecast to continue.

“The situation is chaotic and will have a general impact on Brazil’s economy,” Santos said.

--With assistance from Guilherme Bento, Felipe Saturnino, Daniel Carvalho, Martha Beck and Maria Eloisa Capurro.

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