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Aid Offer Doesn't Stop Brazil Protests

Protests by Brazilian soy producers have entered a fourth week and producers are pushing ahead with a plan to march on Brazil’s capital on Tuesday despite the announcement of 1 billion Reais ($471 million) in additional emergency aid by the government on May 12.

Agriculture Minister Roberto Rodrigues says that the government would subsidize part of the shortfall between production costs and current market prices for soy farmers through its private options program or PROP.

Soybeans have never been part of the government's buying programs before. Through the PROP program, the government basically pays for the premium costs of the options contract purchased by the grower to sell soybeans.

Rodrigues says the government will offer 2 million metric tons of soybeans in the first auction, for which a date will be set next week. Auctions will be held weekly in 2006 until a total of 15-20 million tons is sold, Rodrigues says.

Bernard Appy, executive secretary at the finance ministry who also participated in the conference with Rodrigues, says the government should pay producers between 1.50 and 6 Reais ($0.71-2.84) per 60-kg bag of soybeans, Brazil's largest grain sector and farm exporter.

However, soy producers indicated they were disappointed in the aid package and would continue with protests that have disrupted transportation of soybeans in the large center-west growing region.

“Now we will intensify our protests," Ricardo Tomczyk, director of the Soy Producers Association Aprosoja of Mato Grosso state tells Reuters News Service.

"The government is definitively messing with the man who produces. It would have been better to remain quiet than make an announcement like this," says Tomczyk, a soy producer in Rondonopolis where protests have blocked two main highways.

"Everything is shut down. Not even a bicycle is going to pass," he says.

Celso Saltarelli, president of a farm association in Mato Grosso do Sul tells Dow Jones News Service that the government package was “a step in the right direction,” but says a lot of farmers had already sold their crop.

“We are protesting because we are worried about the future," says Saltarelli on Friday. “This won't stop the protests in Mato Grosso do Sul, at least not today."

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.