Brazil’s crop agency Conab is overhauling grain procurement policies to build strategic food reserves and curb rising inflation, signaling a shift from past administrations’ approaches. Conab President Edegar Pretto announced plans to update rules that currently prioritize farmer income protection over stockpiling, aiming to enable government purchases at lower prices to prevent market spikes.
The move comes as food and beverage prices surged 8% in 2024, with January alone seeing a 1% increase—marking five consecutive months of inflationary pressure. President Luiz Inácio Lula da Silva’s approval ratings have plummeted amid public frustration over living costs, prompting urgent measures. Last week, Brazil slashed import tariffs on select food items, though analysts questioned the policy’s effectiveness.
Conab seeks to allocate an additional 350 million reais ($60.4 million) this year to purchase 445,000 metric tons of corn, rice, and beans, supplementing the 189 million reais already earmarked. Pretto emphasized the need for “flexibility” in procurement to stabilize prices without inflating them, as current thresholds rarely align with market realities.