Poor Infrastructure Is Bogging Down Brazilian Agriculture

Bean plantation in Brazil The government of Brazil has promised farmers 78 billion Brazilian reais, approximately US$ 48 billion, in soft loans to promote agriculture production and help curb inflation announced the country's development bank, BNDES ( Banco Nacional de Desenvolvimento Econômico e Social – National Bank for Economic and Social Development).

The amount includes 65 billion reais for commercial farmers in the crop year that began in July and is 12% higher than the previous crop said, Agriculture minister Reinhold Stephanes during a meeting with farm organizations in the southern city of Curitiba. The rest is earmarked to family and subsistence farmers.

With prices of agriculture commodities soaring to record prices Brazil is seeking to increase output, productivity and inventories, said Stephanes.

"This farm plan is part of a strategic vision" added Stephanes who pointed out that "the future of agriculture depends on productivity and efficiency."

Brazil has the potential to increase crops but faces serious infrastructure problems with an inefficient transport system, lack of storage capacity and insufficient port facilities.

The plan includes 55 billion reais to finance planting and crop sales and 10 billion for tractors, processing equipment, buildings and other machinery and infrastructure investments.

An estimated 10% of the program will be financed by Brazil's state-development bank, which uses tax and payroll-contribution funds as capital for low-interest loans and soft credit conditions.

BNDES will provide an additional one billion reais for promotion of sustainable agriculture, including the restoration of forests and sensitive ecosystems, at an interest rate of 5.75% and for increased productivity at 6.75%.

The plan also includes efforts to rebuild stockpiles of corn, wheat, beans and rice after a decline in the past two crop years. By increasing inventories the government expects to damp the impact of wide swings in international food prices and help to curtail domestic inflation.

Corn stockpiles are targeted to reach 4.1 million metric tons in a year from 211.000 tons; wheat reserves 200.000 tons from 6.000 tons; black beans to 100.000 tons and rice to 1.6 million tons.



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