ANNOUNCEMENT 17 Oct 2013

In October 2013, the government of Brazil announced a change in production support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Globo, "Uva: governo disponibiliza R$ 35 mi para leil?es de PEP e Pepro, "17 October 2013: http://g1.globo.com/economia/agronegocios/noticia/2013/10/uva-governo-disponibiliza-r-35-mi-para-leiloes-de-pep-e-pepro.html

The Hand That Feeds U.S., fact sheet on Brazil: http://www.thehandthatfeedsus.org/handbook/BRAZIL.pdf


Inception date: 17 Oct 2013 | Removal date: 16 Dec 2013
Still in force

Production subsidy

On 17 October 2013, the government of Brazil stated that grapes of the harvest 2012/2013 are going to be subsidized with USD 16.1million(35 million real).
 
The stated amount will be distributed through the Brazilian farmer income support programs PEP and PEPRO. Both programs are based on the auction mechanism further described below. The subsidies will continue until the stated volume has been allocated completely.
 
The programs constitute a production subsidy to Brazilian farmers. Both domestic and international sales are eligible for the subsidy.
 
The design of the Brazilian farmer income support programs can be briefly summarized as follows:

  • PEP / Program for Product Outflow (Premio para Escoamento do Produto): The government first sets a minimum price for the eligible products. The government then auctions off a premium to buyers of the products on the condition that they pay the minimum price to the producers. The buyer submitting the smallest premium wins the right to receive the payment.
  • PEPRO / Premium Paid to Growers (Premio Equalizador Pago ao Produtor): The government first sets a minimum price for the eligible products. The government then auctions off a premium to the producers. The selling price represents the difference between the reference price and the premium reached at the auction. The farmer submitting the smallest premium wins the right to receive the payment.

 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED SECTORS

 

AFFECTED PRODUCTS