Brazil’s crop agency Conab plans to increase food stockpiles to combat rising inflation. Edegar Pretto highlighted the need to revise procurement rules to allow government purchases at lower prices. Recent actions include tariff cuts on food imports, although effectiveness remains questioned. Food prices have significantly risen, worrying consumers and impacting President Lula’s popularity.
Brazil, through its crop agency Conab, intends to enhance food stockpiles to counter rising food inflation. Edegar Pretto, the agency’s head, indicated on Monday that modifications to procurement contract regulations are necessary. Currently, these regulations favor farmers when market prices decline, yet the government faces difficulties in meeting the minimum price thresholds for grain procurement contracts.
This initiative to bolster food stocks signifies a shift in policy compared to previous governments, reflecting the challenges the current administration faces in controlling inflation. Pretto mentioned that discussions are underway to revise existing guidelines to better suit current market conditions. He emphasized the need for more flexibility, advocating for a mechanism that enables the government to purchase grains at lower prices to prevent overall price increases.
To address soaring food prices, Brazil recently reduced import tariffs on selected food items, although some analysts have deemed this approach ineffective. President Luiz Inacio Lula da Silva’s popularity has dwindled, as citizens voice concerns regarding rising consumer costs. Statistics from IBGE reveal an approximate 8% increase in food and beverage prices throughout 2024, with a nearly 1% rise in January alone, marking five consecutive months of increases.
Conab is projected to allocate an additional 350 million reais (approximately $60.4 million) this year for the acquisition of 445,000 metric tons of staple grains such as corn, rice, and beans, as per Pretto’s confirmation of a report by Valor Economico. Currently, Conab has earmarked 189 million reais towards this goal.
In summary, Brazil aims to counteract food inflation by enhancing its grain stockpiles and reforming procurement regulations. Edegar Pretto’s acknowledgment of current challenges reflects the government’s commitment to address rising consumer prices, which have adversely affected President Lula’s approval ratings. The proposed allocation of funds for grain purchases signifies a proactive approach to stabilize food prices amid ongoing inflationary pressures.
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