Domestic Support of Agriculture in Brazil

Transcription

1 Domestic Support of Agriculture in Brazil Izaias de Carvalho Borges PUCCAMP In collaboration with:

2 Introduction Policies Supporting Agriculture in Brazil Policies of Rural Credit Policies Supporting Prices and Income Policies of Rural Risk Management

3 Policies of Rural Credit Period I: to Period II: 1980 to 1995 Period III: 1996 to 2012 R$ (billion)

4 Major changes in Policies of Rural Credit (1996 to 2012) Sources of Rural Credit Reduction in National Treasury contribution Increase in the contributions of the Private Banks Increase in the contributions of BNDES Destination of Rural Credit Purposes: costing credit, investiment credit, and commercialization credit Increase in the participation of credit for investiment (22% to 31%, between 2002 and 2012) Credit for Family Farming (PRONAF) (5% to 16%, between 2002 and 2012)

5 Income-Guarantee Policy Until 1996 After 1996 The Minimum Price Guarantee Policy (PGPM) was executed by means two instruments: Federal Government Purchase (AGF) Federal Government Loan (EGF) Other less interventionist and more market-focused minimum price guarantee were created: Premium for Commercial Buyers Program (PEP) Options Contracts for the Sale Agricultural Products (COVPA) Private Option Risk Premium (PROP) Risk Premium for Soybeans (PESOJA) Equalizing Premium Paid to Producer (PEPRP)

6 Participation in the total quantity (in tons) involved in government actions to maintain the minimum price, between 2003 and PEP PEPRO Opção Pública AGF PROP

7 Distribution of expenditures with PGPM between 2003 and 2012 by products Government Expenditures Quantity in tons Product Participation Product Participation Corn 31.56% Corn 49.37% Wheat 18.81% Soybeans 20.32% Rice 16.28% Wheat 15.12% Cotton 13.23% Rice 8.70% Soybeans 8.44% Cotton 4.12% Coffee 7.37% Coffee 0.93% Beans 2.44% Beans 0.54% Oranges 0.76% Cassava 0.31% Sisal 0.55% Sisal 0.21% Wine 0.29% Cow s milk 0.20% Hybrid Grapes 0.14% Hybrid Grapes 0.09% Cow s milk 0.09% Wine 0.07% Mandioca 0.05% Laranja 0.03%

8 The Risk Management Policy Agricultural Zoning for Climatic Risk is a risk management tool based on climate, soil, and plant data, that indicates the planting times and the best cultivars for each region, helping farmers to deal with the risks inherent to their activity Agricultural zoning was used for the first time in 1996 for cultivation of wheat Crop Insurance Crop insurance presents itself as the primary tool for minimizing the effects resulting from adverse climate risks and has as its main goal the stability of agricultural income The crop insurance policy is executed by means of the Crop Insurance Premium Subsidy Program (PSR)

9 Total number of crops covered by agricultural zoning for climate risk Nºdeculturas / / / / / / / /12

10 Evolution of Crop Insurance Premium Subsidy Program, 2005 to 2012 Budget approved for PSR Number of producers attended

11 Crop Insurance Premium Subsidy Program in 2012, by Activities Activities Policies (Unit) Area Insured (ha) Amount Insured (R$) Premium (R$) Subsidy (R$) Grains 73.74% 91.49% 72.64% 73.24% 74.61% Fruits 20.55% 1.35% 14.30% 20.53% 21.28% Legumes and Vegetables 3.30% 0.22% 3.01% 3.65% 2.60% Cotton 0.18% 0.40% 0.88% 0.68% 0.61% Sugarcane 1.66% 2.53% 3.17% 0.64% 0.45% Total Agriculture 99.43% 96.00% 94.01% 98.74% 99.55% Forestry 0.43% 4.00% 5.81% 1.16% 0.40% Livestock 0.14% 0.00% 0.18% 0.10% 0.05% Total 100% 100% 100% 100% 100%

12 Crop Insurance Premium Subsidy Program in 2012, for Grains Policies (Unit) Area Insured (ha) Amount Insured (R$) Premium (R$) Subsidy (R$) Grains 100% 100% 100% 100% 100% Soybeans 57.22% 62.59% 55.66% 54.02% 48.98% Winter Corn 11.57% 12.71% 8.96% 20.35% 24.40% Wheat 10.41% 9.51% 8.50% 10.08% 12.30% Corn 8.74% 6.35% 8.03% 7.75% 7.00% Rice 7.49% 6.69% 10.90% 4.52% 4.22% Beans 1.43% 0.92% 2.30% 1.32% 1.67% Coffee 2.72% 0.98% 5.47% 1.74% 1.22% Barley 0.28% 0.15% 0.12% 0.17% 0.17% Canola 0.15% 0.10% 0.06% 0.04% 0.04% Oats 0.00% 0.01% 0.01% 0.00% 0.00%

13 Questões Brazil's agricultural policies are successful in achieving economic goals, social and environmental issues, including those related to areas such as food security, poverty reduction, environmental protection and climate change? Expansion of resources for rural credit, for minimum price policies, and for agricultural insurance, is occurring equitably? ie, small farmers and poorer regions are receiving the necessary support? Some changes in the last decade as the largest private sector participation in the implementation of policies to support agriculture, it reinforces the tendency historical exclusion of the poorest farmers? Model the current policy of supporting agriculture is good for periods of economic crisis? Or is it too fragile?

14 Domestic Support of Agriculture in Brazil Izaias de Carvalho Borges PUCCAMP In collaboration with: