Brazil announced drastic plans to increase wheat production and cut its dependency on imported grain mainly from Argentina. The target is by 2012 to supply 60% of the domestic market. Brazil currently imports 80% of the wheat consumed by its population of 186 million.
The "Five year wheat support plan" is being elaborated in consultation with the farmers and millers who have to present their proposals by next April 15. The blue print and consultation process should be finished in six months time
"Proposals will help cut our dependence on wheat imports," said Supply and Marketing Director, José Maria dos Anjos, from the Brazilian Agriculture Ministry. Last year Brazil imported 6.6 million tons, mainly from Argentina.
The plan also anticipates irrigated wheat production in the central region of Brazil taking advantage of abundant water resources. A special group will also establish quality standards in accordance with the demand from Brazilian consumers.
A challenging issue will be that of prices which means raising the minimum payment. Top quality wheat in Brazil has a minimum price equivalent to US$ 232 a ton in the moderate climate southern states, which was attractive until the last harvest. Since then the international price has rocketed and now stands at an exceptional US$ 452.
Millers associations are also complaining because wheat import prices have increased far more since Argentina, embroiled in a conflict with farmers and with the purpose of cooling domestic prices has been limiting exports.
The Brazilian Association of Wheat Millers claims that a growing percentage of Argentine wheat originally shipped to Brazil is being sent to Venezuela which drastically reduced its purchases in the United States.