Brazil to disperse $5.2 billion over three years to boost coffee production

The Brazilian Ministry of Agriculture, Livestock and Food Supply unveiled a plan that will see US$5.2 billion dispersed to 200,000 growers, P&A Marketing reported in its August Coffidential newsletter.  Outlining the ministry's 2012-15 Strategic Plan for the Development of the Coffee Sector, P&A Marketing reported that to maintain its market share of world coffee consumption, Brazil will need to increase its planted area by at least 15 per cent, and increase its yield to at least 26.4 bags per hectare, assuming world consumption grows to 167 million bags in 2020. If consumption grows by the less conservative estimate to 173 million bags by 2020, then the country would need to increase its planted area by 25 per cent and bring its yield up to 29 bags per hectare.  Brazil is currently the largest producer in the world, growing coffee on over 2.3 million hectares. Current average yield sits at 22 bags per hectare.  P&A Marketing reported that financing of coffee inventories will be given credit lines of around US$0.6 billion per year during the period, and another US$0.8 billion would be allocated annually to financing cultivation and commercialisation; recovery of plantations damaged by hail, storms and drought; and a program to put working capital aside for roasting and soluble industries.  Most of the funds will come from the Brazilian Coffee Fund, with other government sources making up the difference.