ANNOUNCEMENT 17 Aug 2012In August 2012, the government of Brazil announced a change in production support.
NUMBER OF INTERVENTIONS
Portal Brazil, 24 November 2011, 'Governo investe R$ 200 milh?es na comercializa??o de trigo': http://www.viasoft.com.br/imprensa/noticia/296/trigo-ministerio-destina-r-330-milhoes-para-garantir-preco-do-cereal
Portaria Interministerial no. 766 of 16 August 2012, published in the Official Gazette of 17 August 2012: http://www.lex.com.br/legis_23600422_PORTARIA_INTERMINISTERIAL_N_766_DE_16_DE_AGOSTO_DE_2012.aspx
On 17 August 2012, the government of Brazil stated that it is going to guarantee the minimum price for the wheat harvest of 2012 with a subsidy worth USD 163.7 million (330 million real).
The stated amount will be distributed through the Brazilian farmerincome support programs PEP and PEPRO as well as the government purchaseprogram AGF. Both income support programs are based on theauctionmechanism further described below. The subsidies will continueuntilthe stated volume has been allocated completely.
The announced programs constitute a production subsidy to Brazilianfarmers. Both domestic and international sales are eligible.
The design of the Brazilian farmer income support programs can be briefly summarized as follows:
The final instrument announced, the Aquisiçăo do Governo Federal(AGF) program, guarantees the minimum price through governmentpurchases.
The GTA includes state guarantees and other financial incentives thatare likely to affect the restructuring and performance of firms facinginternational competition, whether from imports, in export markets,andfrom foreign subsidiaries.