MercoPress. South Atlantic News Agency

Brazilian farms feeling impact of political crisis

Obtaining funds to alleviate Brazil's farming sector of its growing indebtness has turned into an uphill race because of the political crisis, admitted this week Brazilian Agriculture minister Roberto Rodrigues.

Brazil's soybean sector in the south of the country has been particularly hit by drought and the strong Brazilian currency Real which means higher costs in US dollars and smaller profit margins.

In an interview published in the financial magazine "Valor Economico", Mr. Rodrigues reveals that the "(political) crisis is becoming more and more serious on the minute", which significantly hampers normal business.

Political analysts argue that the ever growing difficulties faced by President Lula da Silva administration blocked by allegations of a corruption scheme of money for votes and illegal funding of political campaigns, recall the 1992 crisis which ended with the impeachment and Congressional ousting of then president Collor de Melo.

President Lula and his ruling Workers Party are concentrated in multiple congressional investigations regarding money in exchange for votes and political support, plus election funding with resources skimmed from government owned corporations.

"I'm very tired. It's very difficult convincing the government that the crisis will affect the whole economy", admitted Mr. Rodrigues during a recent agro-business leaders' forum in the northeast state of Bahia.

Mr. Rodrigues is extremely concerned with the ramifications of the political crisis and the overall consequences for the economy and agriculture, which is currently in a contraction process.

Apparently Brazil's cultivated area for the 2005/06 harvest has dropped 3%, the first time in fifteen years this has happened.

"I'm a farmer, I love it and I think it's a great business. However sometimes I feel so frustrated I kind of loose the taste for the game", admitted Mr. Rodrigues who emphasized his despair at the Lula administration's delay in extending relief funds to farmers in the south, almost broke, because of the adverse climatic conditions.

"It's frustrating; the administration is fully absorbed with the Congressional investigations and hearings. On several occasions I've said to myself, it's time to leave, but if I do so it could be even worse".