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Associtrus tries to halt citrus processors dominance

Thursday August 22 2013

THE unrelenting crisis of Brazil's independent citrus production sector is threatening to transform the segment into a sector that is ultra-concentrated "in the hands of a few", warned representatives of citrus producers in São Paulo.

The Associtrus citrus producers' association organised a meeting in Bebedouro on 16 August, attended by more than 200 citrus producers, to adopt a new six-page Orange Manifest demanding radical changes for the entire citrus production sector, including specific demands to maintain orange production viable. The Orange Manifest will be delivered to Brazil's agriculture minister Antonio Andrade in Brasilia later this month.

"Ten years ago, Ademerval Garcia [former president of the Brazilian Association of Citrus Exporters Abecitrus] told me that citrus fruit production would be in the hands of the [juice] industries and 200 of its friends. Today, I say that it will be controlled by the juice industry and half a dozen cronies. Small and medium-sized fruit producers, under the industry's plan, will be barred," said Associtrus president Flávio Viegas to broadcaster Terraviva.

Producers assembled in Bebedouro warned that, for decades, citrus farmers in São Paulo have been forced to abandon their groves as a consequence of the vertical integration of production by juice industries and low prices paid to independent producers.

The manifest requests the creation of a dedicated organ, inside the structures of the federal and state governments, to deal specifically with problems faced by the sector that currently deals with measures adopted independently by more than half a dozen uncoordinated government institutions.

"We demand the urgent creation of a Citrus Production Regulatory Agency or the creation of a specific organ inside government with its own competences and functions to face problems inside this sector," explains the manifest.

Citrus producers also want approval of measures that will slow down vertical integration of the sector, information asymmetry and limit the industry's power at time of fruit purchase. These measures would include the development of a special study by the agriculture ministry (MAPA) to determine the exact size of industry-managed orange groves and a motion towards Brazil's anti-trust organ CADE to impose, as a precaution, measures limiting the percentage of area cultivated with oranges by all industries.

Associtrus also wants CADE and MAPA to impose an obligation on orange juice industries to divulge specific information on a quarterly basis, including: (i) juice inventories in Brazil and abroad; (ii) monthly volumes of exported FCOJ and NFC; (iii) average monthly prices of FCOJ and NFC in foreign markets (FCA Europe); (iv) monthly FOB export prices; (v) average monthly transport costs for orange juice from factory to terminals abroad; (vi) average orange juice production yields in boxes of oranges; (vii) orange production forecasts for each harvest and (viii) monthly consumer prices in three principal markets, excluding the US.



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