Jan 05, 2023

Brazil Agriculture Minister Sets Priorities for New Administration

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In a recent interview with Reuters, Brazil's new Minister of Agriculture, Carlos Favaro, indicated that his priorities for the new administration include transforming Conab into an agency similar to the USDA, increasing government stocks of foodstuffs such as corn, rice, and dry beans, doubling the funding for Embrapa to increase research on low-carbon agriculture, and to develop alternative fertilizers to reduce dependence on imported fertilizers.

The new Minister indicated that reforming Conab will be a priority for his administration. He wants Conab to be an information agency that grain markets and the government can turn to for information. Conab currently focuses on the existing crop situation in Brazil, but the Minister wants it to also focus on the future with information on grain stocks, anticipated sales, anticipated domestic demand and export sales, and weather forecasting.

He wants the government to increase government stocks of corn, rice, dry beans to smooth out price variations and to combat hunger. Rice and dry beans are a staple of the Brazilian diet and current stocks are at very low levels and domestic prices are relatively high. This is a tricky proposition because increasing government stocks can act to depress prices, which is good for consumers, but it can also be a disincentive for farmers to increase production in times of high prices.

The Minister wants to double the funding for Embrapa starting in 2023 so they can develop technologies to reduce carbon emissions on farms and ranches and to develop alternative fertilizers to reduce Brazil's dependence on foreign sources of fertilizers.

He also wants to continue improving infrastructure and transportation for the agricultural sector to reduce costs and improve efficiencies.