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Brazil increases acres to reduce wheat imports

Agriculture.com Staff 05/05/2009 @ 6:30am

*(The following article is a special contribution to Agriculture Online from José Rocher, a Brazilian reporter with the Gazeta do Povo, or newspaper for the people).

As Brazil sets out to reduce their wheat imports, farmers in the State of Parana will plant 9.2% more wheat this year, according to a survey conducted by RPC (Rede Paranaense de Comunicação, Paraná State Network) with eight of the biggest cooperatives of the state. Altogether, they will plant 557 thousand hectares vs 510 thousand last year.

If the trend is followed by other farmers in Parana, the wheat planting will grow from 1.15 to 1.26 million hectares in the state. With a record yield in 2008, this year's yields in Parana are expected to drop. Even so, the state can produce up to 3.32 million metric tons, 20 thousand more than the record of 1987/88, due to the increase in planted area.

This is the Brazilian way to self-sufficiency in wheat. The country produces half of its domestic consumption, and Paraná grows 53% of the Brazilian crop. Over the last decade, the country’s wheat area declined, while consumption increased. The production boost was sustained by increasing average yields, which rose from 1.7 to 2.8 tons/ha over the last decade. This year, Brazil has potential to harvest more than 6 millions tons.

The government's goal is to reduce imports. Faced with the forecast that the national crop could fall this year, the government announced that it will pay up to R$ 555 a ton, thus ensuring a minimum price, 15% more than last year. Moreover, the federal government will pay 70% of the crop insurance cost and state government will contribute with 15%. The producer is responsible for 15% of the cost to ensure the wheat crop.

Brazilian imports increased this year, as wheat production dropped in Argentina, which hoped to reap 16 million tons but reaped the half. The country provides more than 50% of wheat imported annually by Brazil. Furthermore, international stocks rose 29% last year (to 158 million tons), but are still down 24% from the late 90s.

This scenario prompted the producers to expand the wheat area. "The increase is justified by the uncertainties of the corn market in Brazil and by the strength of the wheat market," said Vitor Hugo Zanella, agronomist of the cooperative Lar, established in Medianeira (West of Parana state). Lar will plant 50% more wheat this year, the largest increase among the eight cooperatives consulted.

The cooperative Coamo, based in Campo Mourão (Midwest of Parana), the biggest wheat producer in Parana, will increase the planted area from 275 thousand to 298 thousand hectares (8.4%). Antonio Carlos Ostrowski, the technical manager, considers the number may be even higher. "Some regions didn’t finish planting yet,” he said.

*(The following article is a special contribution to Agriculture Online from José Rocher, a Brazilian reporter with the Gazeta do Povo, or newspaper for the people).

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