Brasília, 7/17/2003 (Agência Brasil - ABr) - Within the next few days, the government, through its National Supply Company (Companhia Nacional de Abastecimento) is going to make a direct purchase from farmers in the states of Mato Grosso, Mato Grosso do Sul and Goiás, of 400,000 tons of corn in order to stabilze its stockpiles.

The executive secretary at the Ministry of Agriculture, Amauri Dimarzio, reports that R$200 million has been earmarked for the operation. He points out that so far this year the government has already purchased 1.5 million tons of corn through option contracts. The use of option contracts gives farmers a price guarantee (the atual delivery of the corn takes place in the future after the contract is made).

Ivam Wedekim, the head of Agriculture Policy says the ministry seeks an additional R$450 million to purchase another 2 million tons of corn through option contract auctions.

The government's objectives are to support corn prices even though there will be increased supply on the market, keep farmers producing corn, and avoid a shortage of feed for pigs and poultry. (AB)