Brazil’s rural loans program to remain near 185 billion reais: minister

Brazil's Minister Agriculture Blairo Maggi gestures during a news conference in Brasilia

SAO PAULO (Reuters) – Brazil’s subsidized rural loans program should remain roughly stable for the 2017/2018 crop at around 184 billion to 185 billion reais, Agriculture Minister Blairo Maggi told foreign reporters on Wednesday.

The program, designed to support an industry accounting for roughly 20 percent of Brazil’s gross domestic product according to some calculations, is expected to be announced next week, he said.

Interest rates related to the initiative will be on average 1 percentage point lower than last year, Maggi said, reiterating comments made last week at a conference in Cuiabá, state of Mato Grosso, Brazil’s agricultural heartland.

The minister had defended a 2 percentage-point reduction in interest rates as the central bank has been easing monetary policy amid signs that inflation is falling.

“We don’t want to repeat a story from the past when interest rates were very high on long-term loans,” he said on Wednesday, referring to available financing for machinery acquisition and warehouse construction.

Last week, Maggi told reporters a bigger interest-rate reduction related to the rural loan program was not possible amid the government’s efforts to control public spending.

The minister also said there was no need for Brazil to consider importing robusta coffee at present, despite signs the coming harvest might be a weak one.

Maggi said his ministry had already given its blessing to importing green coffee if it were needed in the future to supply grinders.

(Reporting by Daniel Flynn; Writing by Ana Mano; Editing by Chizu Nomiyama and Matthew Lewis)