BRASILIA (Reuters) - Brazilian state-run lender Banco do Brasil, the country's second-largest by assets, launched a campaign in June to combat a rise in bankruptcy filings in the agribusiness sector, said a senior executive on Wednesday.

Brazilian agriculture retailer AgroGalaxy filed for bankruptcy last week, adding to the trend in the farming powerhouse, affected by declining commodity prices and extreme weather events, including unprecedented flooding and drought.

"The bankruptcy process for rural producers is unhealthy," said Felipe Prince, Banco do Brasil's vice president of internal controls and risk management.

"It puts their assets, which are their land, at risk, and it cuts off access to new credit. Agribusiness is cyclical, and you need resources to start a new crop."

Prince suggests instead assisting clients through measures, such as debt extension and credit management.

As the country's leading lender in the farm sector, with about 50% market share among rural producers, Banco do Brasil has engaged superintendents in key producing regions to warn borrowers about the long-term business risks of bankruptcy.

Prince acknowledged a recent rise in bankruptcy filings, but noted that the overall volume remains small: among the more than 700,000 producers in the bank's portfolio, 150 are currently in bankruptcy protection.

Credit bureau Serasa reported that 321 companies offering products and services directly tied to agribusiness filed for bankruptcy last year, rising 82% from 2022.

Data released this month showed another 82 filings recorded in the first three months of this year.

Speaking to Reuters by phone from New York, where the bank held an event for investors during Climate Week, Prince said Banco do Brasil is working to establish itself as a key player in the market for carbon credits offsetting emissions.

On Tuesday, the bank announced it had secured $800 million from JPMorgan Chase Bank, Standard Chartered Bank, HSBC Bank and Crédit Agricole to finance small and medium-sized producers using low-carbon agriculture methods.

After issuing $750 million in sustainable bonds in March tied to environmental, social, and governance (ESG) commitments, Prince ruled out another operation this year.

"If the opportunity arises (later), we'll tap the market. This is an ongoing strategy," he said.

($1 = 5.4739 reais)