Brazil's National Crop Supply Agency (Conab) announced on Monday rules for two new programs to support prices of soybeans and other grains. It follows criticism of the so-called PROP options auctions system by producers, mainly in the center-west region, who blocked roads and railways throughout May to press demands for government aid to combat soaring debts and production costs.
Under the new Pepro auction program, the government will pay producers directly after receiving proof of the sale and delivery of soybeans or other grains. In the new Pesoja program, processors, exporters and other traders participating in electronic auctions will receive a premium from the government after paying producers for the farm products.
The main change from the PROP auction system is that it includes soybeans, which have been delivered to trade houses and processors but whose price has not yet been fixed by producers.
This was one of the main demands made by producers in Mato Grosso state, Brazil's main soybean producers, most of whom don't have warehouses. Producers, who are in breach of payments contract with the government, may also take part in Pesoja auctions. Details of the two programs are due to be published in the Official Journal on Tuesday after which the government will announce auction dates and volumes.
The President of the Mato Grosso Soybean Producers' Association (Aprosoja-MT), Rui Ottoni Prado, said he expected that the two programs will get the 1 billion reais ($444 million) pledged for the former PROP program. Prado estimated it would finance the sale of 10-15 million tonnes of soybeans.