Brazilian Farmers Want to Be Treated More Like Their American Counterpats

Brazilian farm The SRB (Brazilian Rural Society) is going to promote a seminar in the first quarter of 2009 whose objective is to propose a new model of agricultural policy for the country. The event should count on the participation of representatives of the entire agribusiness productive chain – the private initiative and government.

In the understanding of SRB president Cesário Ramalho da Silva, Brazil, despite being one of the main global producers and exporters of food, never had an effective agricultural policy.

A proof of this is that the global crisis has shown fragility in instruments that, theoretically, should protect farmers and, consequently, the cash cow of the Brazilian economy: agribusiness.

“It cannot be forgotten that agribusiness is the sector that has sustained the trade balance surplus and, with this, foreign currency reserves which, now, grant safety to Brazil,” ponders the president of the SRB.

Ramalho da Silva understands that an effective reform in Brazilian agribusiness entails a profound transformation in the rural credit policy, whose instruments are now inadequate, to guarantee producers sufficient funds for the plantation and trade of crops.

“Our competitors, North American and European farmers, for example, counted on sophisticated financial instruments to protect themselves from negative events (climate, price oscillation, etc.),” stated the SRB president.

Ramalho recalls, for example, that farmers in the land of Uncle Sam and of the European Union also count on efficient insurance and, obviously, heavy subsidies. Be they in the form of direct transfer of funds, purchase of stocks, imposition of tariffs and other customs barriers on foreign products. In Brazil there is none of this and, for this reason, the sector should feel the global crisis heavily.

He knows that Brazil counts on a guided rural credit system, with controlled interest rates. However, this instrument is fragile. Credit depends on limited funds, and reaches just 30% of the needs of farmers. The remaining 70% must be supplied by the farmers themselves, trading companies and other financing lines, with market interest rates. That is, the current system does not recognize agriculture as a risk activity.

The inefficient subsidized rural credit policy is recognized by the Federal Government itself, which has already started discussions with the objective of promoting reformulation of the agricultural credit system.

One of the critics of the current credit policy is the Agribusiness vice president at the Bank of Brazil, former Agriculture Minister Luis Carlos Guedes Pinto. Guedes, in a recent meeting at the Technical Agriculture, Insurance, Rural Credit, Logistics and Storage Commission of the Federation of Agriculture and Livestock of the State of Mato Grosso do Sul (Famasul), classified as inadequate the national rural credit policy – unaltered over the last 42 years.

Guedes believes that the credit policy is one of the causes of the paradox lived by the productive sector in Brazil, which simultaneously presents growing levels of productivity and finds it harder and harder to pay agricultural debts to the financials system.

To change this scenario, the Bank of Brazil plans to propose to the Federal Government reform in the rural credit system in Brazil. The intention is to recognize that agriculture is a risk activity. “A risk that must be covered, due to the nature of the activity,” said the SRB president.

To the president of the SRB, in the face of the tsunami in the global economy, a seminar has been suggested to discuss and propose a new agricultural model, based on a modern and efficient policy for the sector. That is his suggestion to sectors directly or indirectly connected to the agribusiness productive chain.

That is, to make use of the crisis, to take from it lessons that contribute to the formulation of an agricultural policy that permanently guarantees to Brazilian producers the peace he needs to continue planting.

Anba

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