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Brazil Ponders an Agribusiness Overhaul to Face Global Crisis

Brazil's agribusiness How the global agricultural crisis will impact agriculture should be the theme of a meeting between heads of cooperatives and Brazil's minister of Planning, Paulo Bernardo, and the president of the Brazilian Central Bank, Henrique Meirelles, to take place this Wednesday, December 17, in Brazilian capital Brasília.

To cancel or minimize the losses that the crisis is already causing to the entire productive chain of Brazilian agribusiness, cooperatives defend the creation of mechanisms that guarantee the trade of the crop and allocation of funds for the financing of turning capital and correction of minimum prices.

The turning of Brazilian Development Bank (BNDES) funds to agricultural cooperatives and rural credit should also be defended by the managers of cooperatives. Changes in the official rural credit policy should also be evaluated.

This change has already received the green light of the government, which has a group of specialists studying a new credit policy for the Brazilian agricultural sector.

This information was disclosed December 16 by the minister of Agriculture, Livestock and Supply, Reinhold Stephanes, who participated in the public audience of the Economic Affairs Committee, of the Federal Senate.

According to Stephanes, the current model is overdone and, to guarantee the future of agricultural production, it is necessary to restructure credit and price policies as well as rural insurance.

All sectors connected to agribusiness are facing credit problems, said the president of the Higher Agribusiness Council of the Federation of Industries of the State of São Paulo (Fiesp), Roberto Rodrigues, to Agência Brasil.

In case of credit, Rodrigues pointed at greater difficulties and lack of Advances on Exchange Contracts (ACCs) and the fact that funds, although announced, do not reach producers. When they arrive, they are very expensive, pointed out Rodrigues, who was minister of Agriculture in the first term in office of Brazilian president Luiz Inácio Lula da Silva.

Foot on the Brake

Cooperatives based in the state of Paraná should end the year with record-high revenues of 20 billion reais (US$ 8.4 billion). Nevertheless, due to the effects of the global crisis, as a preventive measure, they should reduce investment in new projects by 30% in 2009.

This year, investment totaled 1.2 billion reais (US$ 506 million). According to the Union and Organization of Cooperatives of the State of Paraná (Ocepar), the cooperatives employ 800,000 people, answer to 18% of the state's GDP and to 55% of the local agribusiness economy.

From January to October, Brazil exported 696,000 tons of fruit, generating revenues of US$ 571 million. The result shows growth of 13% over the same period of last year. Figures supplied by the Brazilian Fruit Institute (Ibraf) show that, in the last eight years, exports have grown by an average of 12.25% a year.

Fruit farming, which grows at 4.6% a year, is the economic activity that generates the highest number of direct jobs: 5.6 million, answering to 36% of the Brazilian agribusiness workforce. In 2009, fruit production in Brazil should reach 42 million tons.

Human Development

The United Nations Development Program (UNDP) is preparing a Human Development Report in order to consolidate opinion polls and socio-economic data on youths from the Mercosur. The survey, which should be launched on April 2009, is going to bring together information such as average level of education, trouble entering the formal labor market and violence.

The report is going to include cross-referenced data on violence, health, education, culture and work in Brazil, Paraguay, Uruguay and Argentina. Furthermore, it is going to feature an opinion poll among youths from Rio de Janeiro, Montevideo, Buenos Aires and Asuncion about future expectations, obstacles to social inclusion and vulnerability to violence.

Radio UN, of the United Nations, has informed that the government of Brazil should make a US$ 300,000 contribution to the supplementary budget of the International Labor Organization (ILO) and, with this, should become the first donor in the southern hemisphere to make this kind of investment.

The Brazilian contribution should be used to support programs in Latin America and the Caribbean with the objective of promotion of the main principles and fundamental rights of labor.

Anba

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