Government signals support for wheat producer for low prices

São Paulo – the Ministry of agriculture reported on Friday that the federal Government may authorize operations to support the marketing of wheat, whose prices are below the minimum guaranteed by the public policies discouraging producers.
The support would be made through auctions of Equalizer Award paid to the Rural producer (Prepo Hill) and award for product Flow (Pep), a grant which aims to stimulate business.
According to the Ministry, the measure, which is processed in the economic area, aims to support producers who suffer with low prices of the big crops expected in 2016/17, whose harvest is underway.
Given the large supply also in the global market, the situation is so serious for producers that lots of high quality wheat are being traded for poultry and swine farms, which use the grain in preparation, according to report from Reuters showed on Friday.
The Brazilian market is with quotes below the minimum price of real 644.17 per tonne for wheat bread type 1, according to the statement from the Ministry.
A Ministerial Ordinance, signed by the ministries of Agriculture, finance and planning, "will be published in the Official Gazette for the measure to take effect," said the folder in note, which did not specify when the publication would occur.
Auctions, if the Ordinance is confirmed, will be carried out by the national supply company (Conab).
The Prepo Hill auction, according to the Ministry, may participate in farmers and cooperatives. To receive the prize, they will have to prove the sale of the product to receive a subsidy from the federal Government.
According to the note, could attend the Pep economic agents (mills, merchants, processing industries and food industries) willing to purchase the product for the lowest price.
In mid-October, the Government said it evaluated measures to ensure minimum price of wheat.
With the expectation of Government support, the business in the market have walked slowly.