Luiz Inácio Lula da Silva, the president of Brazil, announced Brazil's 2009/2010 Agriculture and Livestock Plan, which will provide US$ 53 billion in aid, to help Brazilian farmers take advantage of rising global demand for food. This represents a 37% increase over the previous farm year.
Most of the aid will be in the form of loans to finance planting and investments in transportation, storage and other agriculture infrastructure to increase output and for price support programs, according to Reinhold Stephanes, Brazil's agriculture minister.
"This ambitious plan has an overall budget increase of 37% and of 42% more specifically for agriculture, to prepare Brazil for when United States and Europe wake up from the current crisis", said Lula da Silva in Londrina, in the southern state of Paraná (soybean epicenter) where he made the official announcement.
"Imagine a huge bear hibernating in a frozen cavern. That bear is the United States and Europe, and when they wake up they will want to buy, and we must be ready to produce, sell, make money and strengthen our industry," added the Brazilian president.
"Agriculture is one of the dynamic sectors of our economy that will help us overcome the world economic crisis," Stephanes said. "I don't see why Brazilian agriculture can't grow five, six, or seven percent this year."
The plan contemplates increases averaging 65% for 33 different crops support prices, including the main commodities exported by Brazil. The minimum price for rice increases 20%, milk 15%, manioc root 12%, soybeans 10% and corn 6%, according to the official statement.
The volume of credit is also increased 20%, at fixed rates for agriculture. Last year this added to US$ 16.4 billion.
Brazilian farmers, the largest exporters of coffee, beef, orange juice and sugar and the second-largest exporters of grains such as soybeans are responsible for about a third of Brazilian economic output, Stephanes said. Without increased aid, farm debt and limited credit will make it hard for Brazil to take advantage of an increase in world food demand, he insisted.
Of the total program for 2009-2010, 92.5 billion Brazilian reais will be directed to commercial farmers, and 15 billion Reais to family farmers. Investments in efficiency will get 14 billion Reais, the Agriculture Ministry said in a statement.