To avoid a possible escalation in rice prices, the National Supply Company (Conab) will buy the product already industrialized and packaged on the international market. The information was given this Tuesday (7) by the Minister of Agriculture and Livestock, Carlos Fávaro. This is one of the effects of the floods in Rio Grande do Sul, a state responsible for 70% of national rice production.
According to the minister, losses in farming, in flooded warehouses and, mainly, the logistical difficulty in transporting the product, with highways closed, could create a situation of shortages, increasing prices in commerce.
“The problem is that we will have losses of what is still in the field, and some things that are already in the warehouses, in the silos, which are flooded. Furthermore, the great difficulty is the logistical infrastructure of getting it out of Rio Grande do Sul, at this moment , and take it to consumer centers”, he explained. Resources for the public purchase of packaged rice stocks will be made possible through the opening of extraordinary credit.
“One of the measures is already being prepared, a provisional measure authorizing Conab to make purchases, in the order of 1 million tons, but it is not competing. Conab will not import rice and sell it to wholesalers, who are buyers of the farmer’s products The first step is to avoid shortages, avoid speculation”, added the minister. The MP depends on the approval, by the National Congress, of a legislative decree that recognizes the public calamity in Rio Grande do Sul and, therefore, suspends the fiscal limits imposed by legislation to expand the budget. The decree, which has already been approved by the Chamber of Deputies, should be voted on this Tuesday by the Senate.
In the first stage, the auction to purchase Conab, a federal public company, will be for 200 thousand tons of rice, which must be imported from neighboring Mercosur countries, such as Argentina, Uruguay and Paraguay, and eventually from Bolivia. “If we are quick to import, we maintain [o preço] stable”, he guaranteed. The remainder, up to a total of 1 million tons, will be imported according to market assessment. This quota can still be increased, if necessary, assured the minister.
Fávaro explained that Conab should only resell the product on the domestic market directly to small markets, on the outskirts of cities, especially in the North and Northeast regions, so as not to affect the relationship between Brazilian rice producers and wholesalers, who are their main customers. Earlier, in an interview with Brazilian Communication Company (EBC), President Luiz Inácio Lula da Silva had anticipated information that the country might have to import rice and beans. However, according to Minister Fávaro, only the import of rice will be necessary.
Brazil produces around 10.5 million tons of rice, of which between 7 and 8 million come from producers in Rio Grande do Sul. Annual domestic consumption, at 12 million tons, exceeds national production, and the country already imports the grain every year.
Debt extension
Minister Carlos Fávaro also reported having met, earlier, with representatives of the Agriculture Federation of Rio Grande do Sul and 123 rural unions to assess the sector’s demands in light of the disaster caused by the rains in the state. The holder of the Agriculture portfolio said that, at the request of producers, the government should analyze the request for an immediate extension, for 90 days, of all debts in the sector.
The extension is for the payment of installments of loans and financial operations for costs and investments, contracted by producers. The measure needs approval from the National Monetary Council (CMN), formed by the Ministries of Finance, Planning and the Central Bank. The body is expected to hold an extraordinary meeting in the coming days to forward the request of producers from Rio Grande do Sul.
