Heavy bet of Brazilian government to increase Ag production

President Lula launched last week one of the most ambitious plans ever in Brazilian history to increase agricultural production. Brazilian farmers have experienced severe financial stress during last campaign.

With this new Plan, Lula Da Silva increases 37% the agricultural budget and increases 20% the loans with fixed rates for farmers. Under this Plan called Plan Agrícola y Ganadero 2009-2010 Brazil will invest more than u$s53.217 million in the agriculture and livestock sector.

The 37% increase vs. last year budget is what Lula call an incentive measure to be prepared for the new born of US and Europe after financial crisis. ¨Imagine a huge bear inside a cold cavern that when the winter ends will start demanding more and more food¨Lula said comparing these regions with this animal.

The plan also increases the minimum prices paid to farmers in different products. Rice minimum price will increase a 20%; milk, 15%; soybean, 10%; and corn 6 %.

Agriculture Minister Mr. Stephanes also announced the creation of a new government fund against climatic risks. Lula is also looking to include 70 million hectares of the Amazonas to produce more export food.

A Morgan Stanley Research disclosed during past February concluded that there were more than 70% of Brazilian farmers lacking capital for full 2009-2010 planting costs.

Source AgriFood Think Tank