Brazilian Agriculture Gets Over US$ 6 Billion from Government This Year

Brazilian agricultural products Brazil’s Ministry of Agriculture should have its highest budget since Brazilian president Luiz Inácio Lula da Silva took office in 2003. The funds flowing into the sector should reach 11.8 billion Brazilian reais (US$ 6.4 billion) to be turned to projects and activities fostered by the ministry, aimed at increasing agricultural production and development of Brazilian agribusiness.

The figure represents growth of 44% over the 8.2 billion reais (US$ 4.5 billion) of 2003, president Lula’s first year in office, eliminating the inflation accumulated in the period.

The activities that should receive the largest volume of funds this year are “financing, investment, crops and pre-trade of coffee”. The project counts on a budget of 2.7 billion Brazilian reais (US$ 1.5 billion), in funds to be allocated to rural and agro industrial lines of credit to finance maintenance and development of coffee farming. The activity is part of a program for “development of the coffee economy”, which is geared at generating income and development for Brazilian coffee agro industrial production chain.

Another activity that should receive a large volume of funds is the “formation of public stocks”, which is part of the “agro-food supply” project. The project should receive 2.3 billion reais (US$ 1.3 billion) this year. The funds should be invested in the government policy for market intervention, with the establishment of public stocks to guarantee prices and income to producers.

The growth in the budget, when compared to last year was 13%. In 2009, 10.4 billion reais (US$ 5.6 billion) were turned to projects and activities in the rural sector. In nominal values, in 2010 the budget has been boosted by 1.4 billion reais (US$ 760 million).

Flávio Botelho, agronomy professor at the University of Brasília (UnB), recognizes that the budget for the agricultural sector as a whole, including that of the Ministry of Agrarian Development and Science and Technology, has grown in recent years. However, the specialist points out that what is more essential is the observation of how the funds are used.

“If you turn 1 real to Embrapa (the Brazilian Agricultural Research Corporation), it is guaranteed that the medium term return should be anything from 30, 40 to 50 reais. Funds turned to research are very beneficial. Now, Brazil still needs to solve problems like foot and mouth,” he recalls.

The budget turned to actions directly connected to control, prevention and eradication of diseases in animals as well as plant pests has also been expanded this year. In 2010, the funds turned to the sector should reach 231.2 million reais (US$ 125.5 million) programmed for investment in these activities.

The figure represents growth of 37% over the volume of funds forecasted for 2009, 168.4 million reais (US$ 91.4 million). However, last year just 124.4 million reais (US$ 67.5 million) were invested: 74%.

A spokesperson for the Ministry of Agriculture pointed out that not all of the funds approved in the Annual Budget Law last year were made available for investment, which explains the difference in funds forecasted and what was truly disbursed.

This year, the government’s target is for the whole of Brazil to be free of foot and mouth disease with vaccination. The intention also produces reflexes in greater funds for prevention activities, control and eradication, as the North and Northeastern states and regions should receive funds to become considered free of the disease.

Furthermore, according to the organization, there are also high expenses for maintenance of the sanitary situation in units of the federation that are already considered free of the virus.”

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