Brasília, 6/24/2003 (Agência Brasil - ABr) - In an attempt to jump-start development on rural family-owned properties and improve the performance of its number-one, showcase priority program - Zero Hunger - the government will present a series of innovative measures today as part of its Family Harvest Plan, within the framework of the National Family Farm Program (Pronaf). That plan targets boosting production by small farmers. For this harvest (2003/2004) the administration is setting aside R$5.4 billion, the largest amount ever for this purpose.

Besides increasing the funds available for the National Family Farm Program by some 40%, the government also intends to give women and young farmers discounts and more generous interest rates if they provide supplies for the Zero Hunger program. In practical terms, this means that farmers growing at least one of the five principle crops used in program's so-called basic food basket (rice, beans, cassava, corn or wheat) will have access to an additional credit of 50%.

Another factor in the government's strategy is to guarantee the commercialization of family farm produce. Goods not sold on the market will be purchased by the government, following certain criteria, and used in its Zero Hunger program.

Another government goal is to assist small farmers with an annual income of up to R$2,000. Eligible farmers will have access to microcredit of between R$500 and R$1,000, payable in two years, at 1% interest annually. Borrowers who pay on time will get a 25% bonus. For the sake of comparison, financial market interest rates on this type of credit are presently running at 60% annually.

In the midst of so many innovations, the Lula government faces an old adversary of government farm programs: red tape in banks. Bank bureaucracy has long been the biggest enemy of credit-needy farmers. So, in order to ensure that the R$5.4 billion actually reaches farmers the government is setting up a simplified system for financing contracts. Instead of a 10-page contract (which put off farmers with little schooling), the new contracts will consist of a one-page form and that in itself will reduce the cost of bank credit by an estimated 22%. (AB)