June 12, 2013

 

Brazil to invest US$250 million in building grain silos

 

 

In order to address what has become a major problem for the country's vital agriculture sector, Brazil plans to invest around US$250 million in building grain silos, according to Brazilian President Dilma Rousseff on Monday (June 10).

 

"We will expand capacity to store our production," she said on her weekly radio programme. "And we will do it in two ways: financing the construction of new private warehouses and earmarking resources to the construction and reform of the public warehouses," Rousseff said.

 

The plan aims to double the storage capacity of state-owned food distributor Conab. The president cited a finding by the UN Food and Agriculture Organization (FAO) that Brazil, a global agricultural powerhouse, needs to expand its grain storage capacity by roughly 65 million tonnes over the next five years.

 

Cooperatives and private companies will have access to BRL25 billion (US$12.5 billion) in low-interest, 15-year loans to build new silos, Rousseff said. Conab, meanwhile, will get BRL500 million (US$250 million) to expand storage capacity.

 

"What we seek with this is to guarantee that there will be corn, fodder and other kinds of food, for example, to feed livestock in regions affected by drought or where production is not sufficient," the president said.

 

The South American giant has more than 120 million head of cattle. Brazil expects a record grain harvest of 185.9 million tonnes this year, but its storage capacity is only around 140 million tonnes.

 

The FAO recommends that a country have enough capacity to store 1.2 times its annual grain output.

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