Brazil’s Minister of Agriculture, Roberto Rodrigues, says that with changes in macroeconomic policy and lower harvest costs the outlook for 2006 is very positive.
"Harvest costs will be lower this year than they were last year. Either because of a smaller cropland, which may reduce supply and affect prices, or due to changes in government macroeconomic policy which shows signs of being more flexible next year. I believe the worse is over," said the Minister.
Rodrigues said this year’s crisis in the sector was due to various problems. "It was a hard year. There was drought in the south and high interest rates and tight credit everywhere.
The exchange rate ate up the farmer’s profit margin. And then there was the problem of isolated cases of foot and mouth disease that reduced our beef exports by almost US$ 110 million."
Chirac and Farm Subsidies
Earlier this month, the President of France, Jacques Chirac, telephoned Brazilian President Luiz Inácio Lula da Silva for a conversation on farm subsidies.
Chirac wanted details on the Brazilian proposal that would be presented at a future summit to deal with the issue.
Lula suggested the summit to the president of the United States, George W. Bush, and British prime minister, Tony Blair, earlier this year, before the Hong Kong WTO conference.
Chirac is scheduled to visit Brazil in April or May of next year.