Brazil's minimum price policy and the agricultural sector of northeast Brazil

Roger W. Fox
research report

Brazil’s minimum price program operates under a set of minimum prices announced before the planting season. These prices are normally set below the expected market prices at harvest time. Producers, cooperatives, and private handlers may participate in the program either by selling their products directly to the government at the minimum price or by obtaining loans for storage based on the minimum price. The basic objectives of the program are to stimulate production of the supported commodities, reduce annual and seasonal price variations, and regulate stocks in a manner consistent with the price stabilization objective.
This study contains a review and analysis of the program, particularly as it works in the Northeast-Brazil’s “problem” region. The program’s policy background and history are reviewed, The program has undergone numerous changes both legally and in the way it has been applied. Since the early 1960s there has been a much more determined effort to make it a positive instrument of agricultural and economic policy