"SAO PAULO (Reuters) - The Ministry of Agriculture said on Friday that it is anticipating, in an unprecedented way, the release of 5.7 billion reais in resources from the Fund for the Defense of the Coffee Economy (Funcafé), "as a form of support to the sector at this time of crisis caused by the new coronavirus pandemic ".
The release would normally occur in the second half of July, but now the expectation is that the value will be available to producers next week, according to a statement from the folder.
"The ministry sought the early release of resources due to the pressing need of producers to meet the cost of labor and coffee preparation at the time of harvest, especially in that year that increased the protection requirements for workers on behalf of Covid-19 ", said in a note the director of Commercialization and Supply of the portfolio, Sílvio Farnese.
He added that the measure will still allow access to the commercial credit line, reducing the need for producers to sell their production at the time of harvest, when prices fall.
The president of the National Coffee Council (CNC), Silas Brasileiro, agreed in a note that, with Funcafé resources in hand, it will not be necessary to sell the freshly harvested coffee to honor the weekly payroll to harvest workers.
"In addition, it will also be possible to stock between 10 million and 13 million bags," said the sector representative.
Brazilian stressed that Funcafé's initial funds will have maximum interest of up to 7%, 4% for the fund's feedback and a flexible rate of zero to 3% of bank spread.
The contract, however, contains a clause that provides for an adjustment in this percentage conditioned to the announcement of the Safra Plan by the government.
"We have this clause that allows, if the interest in the Safra Plan falls below 7%, that the Funcafé rate follows. Therefore, even those who take the funds now in June may start to have lower interest rates from July 1, without the need to sign an amendment to the contract ", he said.
The forecast of the federal government is that the Safra Plan will be announced later this month.
According to the ministry, 31 commercial and cooperative banks were qualified to invest Funcafé's 5.7 billion reais. The resources involve 1.6 billion for funding, 3.45 billion for marketing and 650 million for working capital for industries. The volume of resources for this harvest is 11.7% higher than that recorded in the previous season."
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