06:22 17Mar09 -Brazil coffee farmers protest low prices, debt
    By Peter Murphy
   VARGINHA, Brazil, March 16 (Reuters) - Thousands of Brazilian coffee farmers abandoned their fields on Monday and swarmed into the streets of this town to demand government help to continue what they say is now a loss-making activity.
   The farmers poured out of buses from towns across Minas Gerais state, the top coffee region in the world's No. 1 grower, and paraded in silence with banners calling for an end to a vicious circle of high costs, low prices and rising debt. 
  

"There is something wrong when something that brings wealth to the country brings losses to the producer," said Paulo Sebastiao, head of a regional rural labor union, told the crowd.
   Growers sat atop tractors in the town square and others crammed in front of the stage applauding speakers criticizing what they said was the government's indifference to coffee, whose wealth helped found the nation.
   "Coffee built Brazil ... and today we find ourselves on our knees," said Gilson Ximenes, head of the CNC, the National Coffee Council, an association of coffee producers.
   Brazil's coffee growers say they were hit hard when fertilizer prices doubled last season, though subsequently fell, and say they have been burdened by successive hikes in the minimum wage when taking on laborers.
   A fall in prices from around $1.44 per lb in September to $1.11 by today has left many producers selling coffee at what they say is a loss, though the weakening of Brazil's currency, the real, in the same period has largely cushioned the blow.
   Critics, however, say the problem has been exaggerated and that growers' representatives are using their political might to make demands of the government. One bank which lends to coffee growers said farmers debts to it had not grown a lot.
   Police said up to 25,000 farmers and sympathizers turned up for the event organized by the "SOS Coffee Cultivation Movement". Many wore black strips of paper over their mouths symbolizing their resentment at having little say in an industry they say exploits them.
   A statement of growers' demands signed by Ximenes included a guaranteed minimum price of 320 reais ($140) per 60-kg bag, a mechanism to enable farmers to repay debts in physical coffee rather than cash and rescheduling of existing debts.
   Brazil's coffee growers are diverse, some farming in hills that prohibit mechanization, others producing specialized coffee that commands a higher price, and others growing on huge plantations, making the financial situation of each different.
   "The (selling) price is too low. At this price it is difficult to make any profit," said Jaciel Pereira Borges, watching the procession pass. He works with his father on their 10-hectare farm in the town of Campos Gerais.
   He said they had accumulated debts of around 9,000 reais ($3,947) which paid for inputs and running the farm, which coffee sales at harvest time did not leave him with enough to repay.
   Organizers warned of rising unemployment and crime in these rural lands that depend on agriculture.
   The government used to buy and store some coffee to tighten the global supply and force prices upwards but this ended in 1991. An incentive scheme last year available to some growers, paying them a subsidy if they sold their coffee above a specified sum, appeared to work well but has not been renewed.
   Carlos Alberto da Costa, head of the world's biggest coffee cooperative, Cooxupe, said that helping farmers obtain a fair price would avoid the disruptive peaks and troughs in coffee prices and global supplies by keeping growers motivated.
   "Production will start to drop and then the price will rise but instead, with a little bit of effort, production can be kept going," he said as speakers yelled rousing closing remarks into a microph

 (Editing by Stuart Grudgings and Christian Wiessner)