MercoPress. South Atlantic News Agency

Brazil boosts agriculture budget by 18% to speed expansion of storage capacity

Agriculture minister Andrade, (soft) loans will cover the entire production cycle

The Brazilian government announced that it is increasing the farm budget, including funds for subsidized loans by 18% to 136 billion Reais (approx 68 billion-dollars) mainly for improving the country’s insufficient storage capacity and new silos.

Agriculture Minister Antonio Andrade said that this plan will finance the entire production and marketing cycle, everything from seed and feed for livestock, to machinery, harvesting, storage and product distribution.

With this financing “we seek to guarantee a big increase in production levels” President Dilma Rousseff said.

The government also announced an additional investment of 500 million Reais (250 million) to improve and broaden the operations of Conab, the government entity tasked with making government food purchases intended for schools and social programs.

Andrade said that the government will free another 25 billion Reais (12.5 billion) in the next five years to finance the construction of private food warehouses. The investment is aimed at improving the capacity to store grains and other products, a sector where the country is significantly lacking.

According to government figures, current storage capacity is about 145 million tons and for the 2012-13 harvest that was not enough to store the full grain and oilseed crop, which was calculated at 184 million tons.

Andrade said interest rates for loans made under the budget would average 5.5%, while financing for investments in farm equipment, irrigation and storage would enjoy rates of 3.5% a year