Resolution CMN No. 2513 — Establishes Conditions for Financing the New Phase of the Recovery Program for Bahia's Cocoa Plantations, Starting in 1998

RESOLUTION NO. 002513

Establishes conditions for financing the new phase of the Recovery Program for Bahia's Cocoa Plantations, starting from 1998, aimed at the recomposition of the plantation with a view to combating the disease "witches' broom".

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 June 17, 1998, considering the provisions of Articles 4, item VI, of the aforementioned Law, 4 and 14 of Law No. 4,829, of November 5, 1965,

RESOLVES:

Article 1. Establish the following conditions for the implementation of the new phase of the Recovery Program for Bahia's Cocoa Plantations referred to in Resolution No. 2,165, of June 19, 1995, keeping the other conditions unchanged:

I - beneficiaries: cocoa producers from the Bahian regions affected by the disease known as "witches' broom" with or without previously granted financing under the Program;

II - volume of resources: amount of R$367,000,000.00 (three hundred and sixty-seven million reais), whereby:

a) in the first phase (1998/2000), the balance of approximately R$215,000,000.00 (two hundred and fifteen million reais) of resources committed to the Program will be used;

b) in the second phase, the convenience of an additional resource injection will be evaluated, considering the results obtained;

III - sources and destination of resources: regarding the amount of the preceding item, the following percentage participations of the sources and corresponding destinations must be observed:

a) 25% (twenty-five percent) of the Constitutional Fund for Financing of the Northeast (FNE), destined for mini-producers;

b) 15% (fifteen percent) of the National Treasury, destined for small producers;

c) 60% (sixty percent) of the National Bank for Economic and Social Development (BNDES), destined for medium and large producers;

IV - financial charges:

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

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

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

V - financeable items: grafting of cocoa trees with tolerant varieties and the recomposition of the "stand" with these varieties, for a population of 1,100 (one thousand and one hundred) cocoa plants per hectare, admitting, furthermore, in the first year of the current phase of the Program, financing for the previous system of control of "witches' broom", for level I infestation, and for pre-grafting practices for levels 2 and 3, based on a specific project of the Executive Commission of the Cocoa Plantation Plan (CEPLAC) and within the limit of 50% (fifty percent) of the area with cocoa plantation;

VI - contracting: at any time, depending on resource availability and the technical indication of each project, such contracting must occur every 2 (two) years, with annual releases for investments and respective maintenance;

VII - repayment schedule:

a) grace period of 2 (two) years from release;

b) amortization method: 16 (sixteen) installments, due in the months of July and January, counted after the grace period, whereby in the months of January payments are 70% (seventy percent) of the total annual installment and in the months of July 30% (thirty percent) of the same value;

VIII - guarantee: at the free discretion between the financed party and the financier, recommending the adoption, including in operations with the risk of the National and State Treasuries, of the principle of evolving guarantee, consisting in the aggregation of value to the property from the incorporation of permanent improvements to it;

IX - operational risk:

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

b) of the Treasury of the State of Bahia, in operations that, although not perfectly adjusted to the norms of the financial agents, are strategic for the control of the disease, respecting the limit of up to 12% (twelve percent) of the amount of resources of the Program provided for the first phase (1998 to 2000);

c) of the National Treasury, in operations formalized by Banco do Brasil S.A., which, although not perfectly adjusted to the norms of that financial agent, are strategic for the control of the disease, respecting the limit of, at most, 68% (sixty-eight percent) of the amount to be applied by that Bank.

Sole Paragraph. In the case of beneficiaries of previous financing under the auspices of the Program who adhere to the new recommended practices, the outstanding balances of their operations may be incorporated into the financing formalized under the terms of this Resolution and rescheduled according to the grace conditions and repayment schedule established in this article.

Article 2. The assumption of risks by the National and State Treasuries will only be admitted in cases where:

I - the payment capacity of the borrower is proven, considering family maintenance and the total indebtedness of the applicant, according to criteria previously approved by the General Supervision Group;

II - the financing has sufficient and executable mortgage guarantees.

Article 3. The contracting of operations with the risk of the National and State Treasuries depends on their framing within the conditions established by the General Supervision Group (GS) and Executive Committee, objects of Interministerial Ordinance No. 582, of September 27, 1996, updated by Ordinance No. 384, of September 22, 1997.

Article 4. Authorized financial institutions are authorized to consider in normal course, until October 31, 1998, the operations previously formalized under the auspices of the Program.

Article 5. Priority must be given to the attendance of borrowers of operations formalized in the previous phases of the Program.

Article 6. The Central Bank of Brazil is authorized to issue the norms deemed necessary for the execution of the provisions of this Resolution.

Article 7. This Resolution enters into force on the date of its publication.

Article 8. Resolution No. 2,497, of May 8, 1998, is revoked.

Brasília, June 17, 1998

Gustavo H. B. Franco
President