October 31, 2005

Brazil to buy US$250 million worth of grains from farmers
 

Brazil's Agriculture Ministry will buy 554 million real (US$250 million) worth of rice, corn and wheat to sustain income of farmers in regions where commodity prices are below average, the government said.

The ministry will buy 460,000 tonnes of rice at 20 real from Rio Grande do Sul, Santa Catarina, Mato Grosso and Para states, or roughly 9.22 million 50-kilogram bags. Another 150,000 bags will be auctioned off on Nov 4.

The government will also spend 400 real/tonne for 270,000 tonnes of type 1 wheat grown in Rio Grande do Sul, Parana and Santa Catarina states. An additional 400,000 tonnes will be auctioned off on Nov 3 from farmers in the north and northeast. In total, the government purchasing plan will commercialise 1.52 million tonnes of wheat.

Brazil's Agriculture Ministry also said in the Thursday announcement that it will by 435,000 tonnes of corn, with the vast majority to be auctioned off next week. Non-auctioned corn will be sold at a guaranteed price of 11-13.50 real for every 60-kilogram bag.

The grains are then added for government stocks and often distributed as part of social welfare programs.

"The government uses these measures to sustain local farmer incomes and, at the same time, fill government stocks," said Ivan Wedekin, agriculture policy secretary at the Agriculture Ministry.