Brazil mulls fund to finance farming insurance, Valor says

August 23, 2016 8:27 AM EDT

A worker cuts sugar cane for cachaca at a micro-distillery, or alambique, farm about 150 kms ( 93 miles) northwest of Rio de Janeiro, August 29, 2008. REUTERS/Bruno Domingos/File Photo

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SAO PAULO (Reuters) - The Brazilian government is considering the creation of a private-sector fund to help subsidize insurance for farmers, potentially cushioning them from possible budget cuts in agricultural aid, newspaper Valor Econômico reported on Tuesday.

According to Valor, the proposed fund would bear part of the cost of farming insurance policies, adding that the idea is under discussion between Agriculture Minister Blairo Maggi's team, insurers and farming groups.

Efforts to contact the ministry's press staff in Brasilia for comment before working hours were unsuccessful.

The government currently subsidizes up to 55 percent of the cost of farming insurance policies depending on the region or the type of crop, Valor reported.

Maggi, who is also a major soybean farmer, says a greater share of the insurance costs should be borne by private investors, the paper said.

His remarks underscore efforts by interim President Michel Temer's administration to scale back heavy government intervention that led to a record budget deficit and Brazil losing investment-grade credit ratings.

The proposed farming insurance fund resembles one created in Spain, according to Valor. Talks on the project are preliminary and may not yield an accord, Valor said.

Brazil is the world's largest exporter of beef, poultry, soybeans, coffee, eucalyptus pulp, concentrated orange juice and tobacco.

(Reporting by Guillermo Parra-Bernal Editing by W Simon)

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