The President of Brazil, Luiz Inácio Lula da Silva, launched in Curitiba, capital of the southern Brazilian state of Paraná, on Wednesday, July 2, the 2008/09 Agricultural and Livestock Plan (PAP), which among other measures wil invest 78 billion Brazilian reais (US$ 48.6 billion) in the agricultural sector.
Of this total, 65 billion reais (US$ 40.5 billion) should be turned to business farming and 13 billion reais (US$ 8.1 billion) to family farming. "The time has come, the country cannot miss this opportunity to take a quantity and quality leap in the production of foods," said the president of Brazil.
The measures announced have two objectives: to stimulate agricultural production at a time of rising international prices, bringing benefits and revenues to Brazilian farmers, and to reduce inflationary pressure caused by food price hikes on the domestic market, by expanding offer. Expectations are for grain and oleaginous plant production to grow 5% in the 2008/09 crop, reaching 150 million tons.
"The world is eating more and we do not know what may happen. We have more Chinese, Indians, Latin Americans and Africans eating, and many more Brazilians," stated president Lula. "We Brazilians, with no arrogance and without any presumption, must face this as an extraordinary opportunity to really become the global breadbasket."
This is the first time that the PAP is released outside Brazilian capital city Brasília. The choice of Paraná was made as the state is the main food producer in the country.
According to the IBGE (Brazilian Institute of Geography and Statistics), Paraná is responsible for 22% of the national grain and oleaginous plant production. In the 2008 crop, the IBGE forecasts that the state of Paraná should harvest 32.2 million tons. Total Brazilian production should reach 144.3 million tons.
The plan announced in Curitiba expands the credit offered to the agricultural sector by 10%. Interest rates should remain at 6.75% a year, which, at a time of rising inflation, means reduction of real interest rates.
The Federal Government is also going to reduce interest rates on credit for those who recover degraded areas and plant grain. With this, the government plans to provide incentives to the recovery of between 60 million and 70 million hectares.
Within the PAP, scheduled to run up to the end of June 2009, the federal government also plans to provide incentives to the acquisition and modernization of machinery and implements. The secretary of Agricultural Policy at the Ministry of Agriculture and Food Supply, Edílson Guimarães, stated that a program should be launched with this objective this week, in Brasília.
The project forecasts the elimination of 4% fees on the liberation of funds for the purchase of tractors. Apart from that, there should be a line of credit of up to 500 million reais (US$ 312.6 million), with interest rates of 7.5% a year, and another 2.5 billion reais (US$ 1.6 billion), at rates of 9.5% a year, for the purchase of machinery.
Rural insurance is another mechanism to support producers that should be intensified in the 2008/09 crop. The volume of funds turned to the payment of awards should rise to 160 million (US$ 100 million). When the federal government implemented the rural insurance for family farming, in 2005, the value was R$ 10 million (US$ 6.3 million).
Omar Nasser works for the Fiep (Federation of Industries of the State of Paraná).
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