Resolution CMN No. 2165 — Establishes Conditions for Financing the Recovery Program for Bahia's Cocoa Crop

RESOLUTION NO. 002165

Establishes conditions for financing the Recovery Program for the Bahia Cocoa Crop, aimed at controlling the "vassoura-de-bruxa" disease and recu- pering the productivity of the ca- cocoa crop.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL NATIONAL, in a session held on May 31, 1995, taking into account the provisions of Article 4, item VI, of the aforementioned Law, and of Articles 4 and 14 of Law No. 4,829, of November 5, 1965,

RESOLVES:

Art. 1 Approve the following special credit conditions for the implementation of the Recovery Program for the Bahia Cocoa Crop:

I - beneficiaries: cocoa producers from the Bahian regions affected by the disease known as "vassoura-de-bruxa";

II - purpose: credits intended for the control of the disease mentioned in the previous item, aiming at the recovery of productivity and competitiveness of the Bahia cocoa crop;

III - financial agents: Banco do Brasil S.A., which will use resources transferred by the National Treasury and by the National Bank for Economic and Social Development - BNDES, and Banco do Estado da Bahia S.A., which will use resources from the National Fund of the Northeast (FNE), transferred by Banco do Nordeste do Brasil S.A.;

IV - volume of resources: amount of R$340,000,000.00 (three hundred and forty million reais), distributed as follows: in 1995, R$100 million; in 1996, R$120 million; in 1997, R$75 million; and in 1998, R$45 million;

V - sources and destination of resources for 1995: R$25 million from FNE, intended for mini-producers; R$15 million from the National Treasury, intended for small producers; and R$60 million from BNDES, intended for medium and large producers;

VI - financial charges for operations contracted in 1995:

a) mini-producer: the usual charges of FNE;

b) small producer: Long-Term Interest Rate (TJLP) plus an effective interest rate of 4% per annum (four percent per year);

c) medium and large producers: TJLP plus an effective interest rate of 6% per annum (six percent per year);

VII - financeable items: investments provided for in the technological package recommended by the Executive Commission of the Cocoa Crop Plan (CEPLAC) for the control of the "vassoura-de-bruxa" disease and recovery of crop productivity, such as pruning, canopy lowering, removal of "vassoura-de-bruxa", chemical control of diseases and pests, fertilization, and prospecting for "vassoura-de-bruxa";

VIII - contracting periods: in 1995, until October 31, 1995; in the other years, from January to May;

IX - repayment schedule: semi-annual amortizations coinciding with the times of revenue realization in the periods indicated in the table below, observing the payment capacity of each producer:

INFESTATION LEVEL TOTAL DEADLINE UNTIL GRACE PERIOD UNTIL ----------------------------------------------------------- 0 (zero) 2 years 1 year 1 4 years 2 years 2 6 years 2 years 3 8 years 3 years

X - classification of producers: for the Recovery Program for the Bahia Cocoa Crop, the following producer classification will be adopted:

PRODUCER SIZE ANNUAL GROSS INCOME (R$)
------------------------------------------------------------- Mini-producer up to 22,000.00 Small producer above 22,000.00 up to 48,000.00 Medium producer above 48,000.00 up to 362,000.00 Large producer above 362,000.00

XI - financing limit: up to 100% of the budget for all beneficiaries of the Program;

XII - technical assistance: the preparation of a project and the provision of technical assistance are mandatory, under the responsibility of CEPLAC and the Bahian Company for Agricultural and Livestock Development - EBDA, with costs limited to 1% of the project value in the contracting years, which may be included as a financeable item. In subsequent years, the burden of technical assistance will be borne by the aforementioned companies;

XIII - guarantees: the choice of guarantees is at the free discretion between the borrower and the lender;

XIV - Program management: to carry out the work of coordination, evaluation, and monitoring of the Program, the General Supervision Group (GS), to be coordinated by the Ministry of Agriculture, Livestock and Food Supply, and the Regional Coordination (GC), to be coordinated by the State of Bahia's Department of Agriculture, are created;

XV - operational risk:

a) of the financial agent in operations fully framed within their respective normative instructions;

b) of the Treasury of the State of Bahia in operations that, despite not being perfectly adjusted to the norms of the financial agents, are strategic for the control of the illness, respecting the limit of up to 12% (twelve percent) of the amount of Program resources forecast for 1995. The contracting of an operation with the risk of the Treasury of the State of Bahia is conditioned to the framing within the conditions established by the General Supervision Group and Regional Coordination.

Paragraph 1 The financial charges are due together with the principal installments, proportionally to the nominal values of each.

Paragraph 2 The borrower is responsible for applying the resources in the execution of the practices recommended by the technical assistance agencies and for paying the loans on the agreed dates. Non-compliance with these obligations implies suspension of credit assistance to the cocoa grower in the other years provided for, subjecting him also to government actions with the purpose of avoiding risks to the success of the Program.

Art. 2 This Resolution enters into force on the date of its publication, with the Central Bank of Brazil authorized to issue the norms deemed necessary for the execution of the provisions of this normative instrument.

Brasília, June 19, 1995

Gustavo Jorge Laboissière Loyola
President