Brazil Pays Growers to Keep Coffee Off Market
BRASILIA, Brazil (AP) _ The government said Friday it will offer farmers $100 million to $140 million in credits to withhold coffee beans from the international market to keep coffee prices stable.
Coffee prices shot up in 1994 after frosts and drought hit the coffee belt in Brazil, the world’s largest coffee producer.
Brazil had expected to harvest 26 million bags in the 1995-96 season. But estimates in November put the crop at 12.7 million to 14.8 million bags. The government’s plan is aimed at ensuring supplies remain limited.
``What we want to avoid is sharp fluctuations in the market,″ said Manuel Bertone, president of the National Coffee Council.
The government hopes the credits will entice growers and exporters to keep 1 million bags of coffee beans from world markets, according to Jose Milton Dallari, secretary of the finance ministry.