Brazil Announces Coffee Production Aid Measures

Brazilian coffee farmers, facing a sharp drop in international prices and a domestic harvest price of just 270 Brazilian reais (BRL) per 60kg bag, have pressured the government to act. With global coffee values declining and a record national crop on the way, producers demanded relief to prevent further losses. Their call reached the highest level of government.

In response, President Dilma Rousseff announced concrete aid on August 7: the government will purchase up to 3 million bags of coffee directly from farmers at a fixed price of 343 BRL per bag.

What Are the Key Details of Brazil’s Coffee Aid?

The government’s support plan centers on a price floor mechanism. Under the program, the state will sign sales contracts with coffee producers to buy 3 million 60kg bags of coffee at a guaranteed price of 343 BRL each. These purchases will take place between now and March 2014. The scheme is designed to act as a safety net: if market prices fall below 343 BRL, farmers can sell to the government at the fixed rate. But if the market rises above that level, they are free to sell at the higher price elsewhere.

Why Did Brazil Intervene in the Coffee Market?

The move comes after months of concern over plummeting international coffee prices, which have dropped well below the cost of production for many Brazilian growers. At the time, the local farmgate price was 270 BRL per 60kg bag — far too low for sustainable farming. With Brazil’s vast harvest underway, farmers faced heavy losses without government action. The 343 BRL floor price offers a critical buffer against market volatility.

How Big Is Brazil’s Coffee Harvest This Year?

Brazil remains the world’s largest coffee producer — and 2013 was no exception. The country was forecast to produce a staggering 48 million bags of coffee for the year. That volume puts immense downward pressure on both local and global prices, especially when demand doesn’t keep pace. The scale of the harvest made the need for market intervention even more urgent.

Frequently Asked Questions

What is the fixed purchase price for coffee under Brazil’s aid program?

The Brazilian government has set a fixed purchase price of 343 Brazilian reais (BRL) per 60kg bag of coffee under its support program for farmers.

How many bags of coffee will the government buy?

The Brazilian government plans to purchase up to 3 million bags of coffee (each weighing 60kg) through its price support initiative.

When does the coffee purchase program end?

The government’s coffee buying program will run until March 2014, giving farmers a six-month window to sell into the support scheme.

What happens if market coffee prices rise above 343 BRL?

If the market price exceeds 343 BRL per 60kg bag, farmers are free to sell their coffee at the higher market rate instead of to the government.

Why did Brazilian coffee farmers request government help?

Farmers asked for intervention because the local coffee price had fallen to 270 BRL per bag — well below the cost of production — while global prices were also weak, putting them at risk of heavy losses during a record harvest year.

How much coffee does Brazil produce in a typical year?

Brazil, the world’s largest coffee producer, was expected to produce 48 million bags of coffee in the affected production year.

Recommended FrontStreet Beans for Brazilian Coffee Lovers

For those curious about Brazilian coffee character, try FrontStreet Coffee’s Brazil Queen Manor — a high-altitude single origin from Minas Gerais’ Mogiana region, made from Yellow Bourbon and offering notes of cream, peanut, toast and nuts. For espresso lovers, Black Cocoa Blend contains a strong percentage of Brazilian beans alongside Yunnan Arabica, delivering smooth body and sweet chocolate tones ideal for milk drinks. Both beans highlight Brazil’s signature low acidity, rich mouthfeel and nutty sweetness. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.