While Australian cattle producers prepare for the impact of the carbon tax, their counterparts in Brazil are about to benefit from a major new agricultural stimulus package.

Brazil’s economy grew by only 0.8pc in the first quarter of 2012, prompting the Government to announce a major new spending program last week designed to stimulate its economy.

The NASDAQ news service has reported the spending will be targeted almost exclusively at purchases of equipment across a range of industries, with Government orders being set out to factories immediately.

The program includes more than $4 billion in direct spending to buy thousands of new school buses, trucks, farm vehicles and rail cars, as well as military and hospital equipment.

Measures targeted specifically at agriculture include a US$57 billion loan program aimed “at reinforcing agriculture’s role as a lever of Brazilian economic growth” the SME times reported.

More than 60pc of those funds are to be allocated to agricultural finance programs designed to improve distribution chains and market products.

Special attention would also be paid to family farming, which currently accounts for nearly 70pc of the country’s food production.

In addition to the purchasing program, the Government has also unveiled a cut in the long term interest rates from 6pc to 5.5pc.

The Government is also introducing new “national preference” rules that will allow purchases to favour Brazilian-made products even if they are more expensive than imports.