In June, Brazil's President Dilma Rousseff and Minister of Agriculture, Livestock and Supply, Mendes Ribeiro Filho launched a new Agriculture and Livestock Plan for Brazil. It will include R$ 115.2 billion (US$ 55.5 billion) in federal government investments in Brazil's agriculture business crop over the 2012-2013 season. This is the highest amount of resources ever invested in this sector.
Brazil will use US$ 41.9 billion to finance the cost and marketing of crops and US$ 13.6 billion will support investment programs. The new plan also boosts the previous crop credit by 7.5% and reduces the controlled annual interest rate from 6.75% to 5.5%.
The new rate is attractive to investors in agriculture, as it represents an 18.5% decrease in financing costs for Brazilian farmers. The total resources with controlled interest rate will be US$ 45.2 billion, which represents an increase of 18.5% over the programmed resources for the previous harvest. The interest-free resources amount to US$ 10.3 billion.
Expanding rural insurance
In the new plan, the federal government will increase subsidies to rural insurance premiums by 5.5% for 2012, totaling US$ 128.6 million. With this measure, government projects to ensure more than 6 million hectares, equivalent to US$ 3.9 billion will cover more than 60,000 contracted insurance policies. In 2013, an additional US$ 64.1 million will guarantee the amount of US$ 192.7 million insured to medium-scale producers.
The government is also committed to supporting the marketing of agricultural products to ensure the selling price is determined based on estimates of the variable cost. For products backed by federal government acquisitions, the plan calls for increasing the current minimum prices for various products, regionally and nationally.
Benefits among ag sectors
For cattle for beef and dairy the 2012-13 plan renews a credit line for the purchase of breeding cattle and buffaloes.
The plan also created a credit line for retaining pork breeding animals.
It also opens a credit line for the acquisition of breeding sheep and goats.