Government encourages corn planting to increase grain supply

Measures to encourage the planting of corn for the 2021/2022 harvest were approved this Thursday (29/04) by the National Monetary Council (CMN). The proposals, which include the offer of more credit and marketing support mechanisms to support farmers in increasing corn and sorghum production, were forwarded by the Ministry of Agriculture, Livestock and Supply (Mapa).

“The measures are a response to the strong global demand for food and the devaluation of the Real, which continue to boost the country's grain exports. In this way, it reduced the local availability of basic products and inputs for animal feed”, highlights the director of Credit and Information, at the Mapa Agricultural Policy Secretariat, Wilson Vaz de Araújo.
 
The CMN decided to increase the funding limit, from July 1st of this year, from R$3 million to R$4 million per producer, for the production of corn and sorghum. Also from July 1st, medium-sized rural producers will be able to access funding for planting the two cereals, up to a limit of R$ 1,75 million. Previously the ceiling was R$1,5 million.
 
Another measure allows, exceptionally, within the scope of the mandatory resource source, financing of Producer Price Guarantee Financing (FGPP) for the acquisition of corn and sorghum, limited to R$65 million per beneficiary, assuming the market price as a reference instead of the minimum price. The financial institution is obliged to direct resources of 27,5% of its movement to invest in rural credit operations.
 
Conab estimates that Brazil's total corn production in the current season should be around 109 million tons and sorghum production at 2,6 million tons.

Funcafe

The CMN also approved the distribution of resources from the Coffee Economy Defense Fund (Funcafé) for the 2021/2022 harvest, in the amount of R$5,9 billion. 

In directing the values ​​assessed by the Council, an increase of 21,86% was established for the Financing for Coffee Acquisition (FAC) line, going from R$1,1 billion to R$1,354 billion. The values ​​from the previous year were maintained for the other credit lines, that is, R$1,6 billion for Costing operations; R$2,2 billion for Commercialization, R$630,5 million for Working Capital and R$160 million for the recovery of damaged coffee plantations. 

The equality of interest rates for credit purposes with fund resources should be addressed at the next CMN meeting.