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November 2, 2017

Brazil Farmers fear Programs may not be funded at Promised Levels

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazilian farmers are worried that the funding levels for various farm programs in the 2017/18 Harvest Plan will end up being less than what was initially announced by the government. It appears that the crop insurance program and the minimum price guarantee program may be the two programs underfunded the most.

Various farm groups recently met with the Ag Policy Secretary from the Ministry of Agriculture, Neri Geller, to express their concerns. The groups included the Brazilian Agriculture and Livestock Confederation (CNA), the Soybean and Corn Producers Association of Mato Grosso (Aprosoja MT), the Brazilian Corn Producers Association (Abramilho), the Agricultural Institute (IPA), and the Brazilian Organization of Cooperatives (OCB).

They emphasized to the Secretary that when the original 2017/18 Harvest Plan was launched in June, the crop insurance program had a funding level of R$ 550 million, which represented an increase of 37.5% from the previous year. The funding bill sent to the Brazilian Congress for approval only contained R$ 400 million for crop insurance. The underfunding for the guaranteed minimum price was even more significant. The demand for the program was forecasted to be R$ 2.7 billion, but funding level for the program was set at R$ 700 million.

These groups want the Federal Government to revisit the funding levels for these programs and for the Minister to present to Congress a letter stating the need to fund these programs at the original level. They feel these programs are especially important for medium and large scale farmers.

The groups stress that agriculture is an integral part of the Brazilian economy and that there are inherit risks such as adverse weather that farmers cannot control and that they need the crop insurance program to help lay off those risks.