Brazil's new president has proposed delaying a 2.5 billion real (US$700 million) military jet fighter contract in order to fund new anti-hunger programs, the country's defense minister said Friday. Jose Viegas said the contract to modernize the air force will be delayed for a year.

"Funding social projects is more important in Brazil right now," Viegas said. "But this doesn't mean that the purchase will be abandoned."

Silva was holding his first cabinet meeting Friday, and planned to meet separately later with Jose Graciano, who will oversee the hunger program.

The contract, which would be used to buy 12 to 18 new jet fighters, is part of a 11.9 billion real (US$3.4 billion) planned overhaul of the air defenses of Latin America's largest country.

The purchase is aimed at shoring up surveillance of Brazil's vast and porous Amazonian border to prevent incursions by Colombian rebels and drugs, weapons and timber smuggling.

Most of Brazil's 60 fighter jets - French-built Mirages and American-built F-5s - were purchased in the 1970s and are outdated compared to the air forces of Brazil's neighbors, said John Shields, an expert on South American defense and political issues.

The government has not set aside money for the fighter jet contract, but lawmakers authorized the agreement under the condition that the contractor provide financing and transfer technology to the air force.

Also under consideration are used jet fighters. The United States' Lockheed Martin Corp. reportedly submitted a 420 million reals (US$120 million) proposal to supply 18 used F-16s.

In his inaugural address, Silva said his top priority is eliminating hunger among the country's estimated 54 million poor, 24 million of whom live on less than 3.5 reals (US$1) per day. Viegas, the defense minister, said last week that Silva wants the military to provide planes, equipment and soldiers to help in the anti-hunger campaign. He did not mention delaying the jet fighter contract.

The military's 25.9 billion real (US$7.4 billion ) budget is scheduled to be cut by 987 million reales (US$282 million) in 2003. A budget crunch last year forced the army to discharge 45 000 recruits four months early because there wasn't enough money feed and clothe them.

Despite budget pressures, Silva announced plans before his inauguration to revive a nuclear submarine project to patrol Brazil's 5 000-mile (8 500 kilometer) Atlantic coastline.

The British-Swedish consortium of BAE Systems and Saab; the French-Brazilian consortium of Dassault Aviation and Embraer; Lockheed Martin; and the Russian-Brazilian consortium of Sukhoi and Avibras Aeroespacial are all bidding for the fighter jet contract.

The Brazilian contract would be the largest purchase of jet fighters by any Latin American country in two decades. Last year, Chile signed a deal to buy 10 F-16s from Lockheed Martin Corp. for US$600 million.

With acknowledgement to Sapa and BC-Brazil-Military-LD-Air Brasilia.