BRAZIL LAUNCHES AGRICULTURE AND LIVESTOCK PLAN FOR THE 2012/2013 CROP

Plan includes record amount of resource support from the Brazilian government, focusing on increasing financing and marketing benefits for medium-scale farmers, cooperatives and sustainable production

BRASILIA, 28 June, 2012 – Brazil’s President Dilma Rousseff and Minister of Agriculture, Livestock and Supply, Mendes Ribeiro Filho today launched a new  Agriculture and Livestock Plan for Brazil, which will include R$ 115.2 billion (US$ 55.5 billion) in federal government investments in Brazil’s agriculture business crop over the 2012/2013 season. This is the highest amount of resources ever invested in this sector. Of these resources, R$ 86.9 billion (US$ 41.9 billion) will finance the cost and marketing of crops, and R$ 28.2 billion (US$ 13.6 billion) will support investment programs. The new plan also increases the previous crop credit by of 7.5 percent and reduces the controlled annual interest rate from 6.75 percent to 5.5 percent.

The new rate is attractive to investors in agriculture, as it represents an 18.5 percent decrease in financing costs for Brazilian farmers. The total resources with controlled interest rate will be R$ 93.9 billion (US$ 45.2 billion), which represents an increase of 18.5 percent over the programmed resources for the previous harvest. The interest-free resources amount to R$ 21.3 billion (US$ 10.3 billion).

"The reduction in interest rates, which is happening throughout our economy, is also a hallmark of this plan. Agriculture is also being benefited by this reduction. All their credit lines had their rate set at 5.5 percent per year, lower than the previous year and equal to the Investment Support Program, the PSI, by the Brazilian Development Bank. This is the recognition that agriculture plays a key role in tackling the international crisis," said Brazilian President Dilma Rousseff during the launching ceremony of the new plan.

Minister Mendes Ribeiro has commented that resources will be essential for the producers to increase agricultural production and ensure food security with respect to the environment. "The R$ 115.2 billion will be key to continued progress of Brazilian agriculture," he said. “The focus of this plan is the medium-scale farmers, cooperatives and sustainable production. The Low Carbon Agriculture program, which is a priority program to encourage the adoption of sustainable practices by Brazilian farmers, will provide R$ 3.4 billion in funds for financing.”

Financing Costs and Marketing

The limits of financing costs and marketing for Brazil’s agricultural crops have also been extended.  Financing support for cost expenses has increased from R$ 650,000 (US$ 313,000) to R$ 850,000 (US$ 409,000) per producer, while the increase for marketing support has increased from R$ 1.3 million (US$  626,000) to R$ 1.6 million (US$ 771,000) per farmer. In both cases, there has been a 23 percent increase in federal support over the previous crop. 

Committed to supporting Brazil’s agricultural cooperatives, the government has raised the funding ceiling from R$ 60 million (US$ 28.9 million) to R$ 100 million (US$ 48.2 million) per cooperative through a cooperatives development program, and from R$ 25 million (US$ 12 million) to R$ 40 million (US$ 19.3 million) per cooperative through a capitalization program.

Medium-scale producers are the main focus of the new Brazilian Agriculture and Livestock Plan.  In Brazil’s  National Program Support to Medium Agricultural Producer, the interest rate was reduced from 6.25 percent to 5 percent per year and the volume of resources for funding has expanded from R$ 6.2 billion (US$ 3 billion) to R$ 7.1 billion (US$ 3.4 billion), an increase of 15 percent over the previous harvest. The annual gross income to the inclusion of the producer in the program has also been raised from R$ 700,000 (US$ 337,200) to R$ 800,000 (US$ 385,400) and the credit limit per beneficiary will increase from R$ 400,000 (US$ 192,700) to R$ 500,000 (US$ 240,900). The amount available for the investment of medium-scale farmers is now R$ 4 billion (US$ 1.9 billion), compared to R$ 2.1 billion (US$ 1 billion) in the previous harvest. With these measures, the number of producers benefitted by the program will increase.

Rural Insurance

In the new plan, the federal government will increase subsidies to rural insurance premiums by 5.5 percent for 2012, totaling R$ 267 million (US$ 128.6 million). With this measure, government projects to ensure more than 6 million hectares, equivalent to R$ 8 billion (US$ 3.9 billion) will cover more than 60,000 contracted insurance policies. In 2013, an additional R$ 133 million (US$  64.1 million) will guarantee the amount of R$ 400 million (US$ 192.7 million) insured to medium-scale producers.

The government is also committed to supporting the marketing of agricultural products to ensure the selling price is determined based on estimates of the variable cost. For products backed by federal government acquisitions, the plan calls for increasing the current minimum prices for various products, regionally and nationally.

Sector Benefits

Cattle for beef and dairy: A credit line for the purchase of breeding cattle and buffaloes has been renewed. In this case, the limit per producer goes up to R$ 750,000 (US$ 361,300), with up to five years for payment , two years of grace period and an interest rate of 5.5 percent per year. The increase in the limit of marketing to the dairy agroindustries rose from R$ 40 million (US$ 19.3 million) to R$ 50 million (US$ 24.1 million) and the payment period rose from 180 to 240 days.

Pork: A credit line for retaining breeding animals was created through the new plan, with a limit per producer of up to R$ 1.2 million (US$ 578,100) and a payment period of up to two years at an  interest rate of 5.5 percent per year.

Goat and sheep production: A credit line has been opened for the acquisition of breeding sheep and goats, at up to R$ 600,000 (US$ 289,000), with payment of up to ten years, including three years of grace period and an interest rates of 5.5 percent.

Flávia Ribas
Área Internacional
Secretaria de Comunicação Social (SECOM)
Presidência da República 
Esplanada dos Ministérios - Bloco A - 6º andar 
70054-900 Brasília-DF 
Tel.: + 55 61 3411-4914
Cel.:+55 61 8117-7509
Fax: +55 61 3411-4924
e-mail:  flavia.ribas@cdn.com.br  
Portal Brasil: www.brasil.gov.br

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