Brazil's federal Banco do Brasil will inject 550 million reais ($255 million) into the national Coffee Defence Fund, the agriculture ministry said on Friday.
The funds will be used to extend subsidised credit lines at around 9.5 percent annually to the coffee sector to finance harvest operations, storage, transport and other operations. The funds will start to be disbursed next week.
Brazil is the world's largest producer and exporter of coffee.
With the added funds from Banco do Brasil, Ricardo Conceicao, vice president of agribusiness at the bank, estimates that 1.4 billion reais in funds will be at the disposal of the coffee sector, 30 percent more than in 2005.