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A highlight of the Harvest Plan 2014/2015 is the allocation of R$ 700 million to the Rural Insurance Premium. This is the same amount as the previous season and sufficient to cover about 10 million hectares and more than 80,000 farmers.
To guarantee crops, the Plan also prioritizes investments in storage infrastructure through the newly created Warehouse Expansion and Construction Program (PCA). The plan makes available some R$ 3.5 billion in credit to expand farm storage capacity. The PCA also finances storage units in urban areas, to facilitate logistics and improve freight transportation.
Financing conditions are special:
100% project financing
Interest rate of 3.5%
Repayment terms of up to 15 years
3 years repayment grace period
Medium-sized farms are especially benefited through the Harvest Plan 2014/2015. The supply of funds for investments, expenses and marketing increased 26.5% compared to the previous plan, now reaching R$ 16.7 billion. The main sources of financing are the National Bank for Economic and Social Development (BNDES), rural savings accounts through Banco do Brasil and Constitutional Financing Funds.
Marketing support is one of the actions that stimulate agribusiness, with the Federal government defining the minimum price for purchases, price equalization or financing operations. Federal government acquisition (AGF) is another tool for ensuring minimum price guarantees for farmers or cooperatives, through direct government purchases, provided the products are properly stored in locations registered by the National Supply Company (Conab). These purchases became part of the public stock.
• Investments in roads, railways and ports revolutionize production shipments
There are also sale option contracts — bonds offered at auction by the Federal government to farmers and cooperatives, for a certain price, with a future exercise date. The option contract provides the right to submit to the government the amount of products linked to the operation, at maturity, provided the specifications defined in the contract are met. This kind of action has the potential to reveal the government’s expectations of future prices to market agents in addition to representing price guarantees for producers and cooperatives.