UPDATE 1-Brazil boosts funds available under farm loan program to $58 bln -official

-official@ (Adds details from interview)

SAO PAULO, March 28 (Reuters) - Brazil's Agriculture Ministry plans to increase funds available to finance the farm sector, an official said on Wednesday, citing fiscal relief stemming from a fall in inflation.

Neri Geller, the ministry's economic policy secretary, told Reuters funds available under the 2018/2019 farm loan program will reach up to 194 billion reais ($58 billion), a 2 percent rise from the previous crop cycle.

The government's farm program offers subsidized loans to the agriculture producers in order to finance production and make investments such as in silos and agricultural machinery.

Geller said interest rates on the subsidized loans will fall after Brazil cut the benchmark Selic rate to 6.5 percent, the lowest level in history.

Last year, interest rates on farm loans were between 6.5 percent and 8.5 percent annually.

Though Geller declined to provide details on the expected drop in interest rates, he said the plan is aligned with the Finance Ministry.

"The farm sector is demanding more credit," Geller said, adding it is in the government's interest to support the sector. "Agribusiness investments help the economy, which in turn can generate additional tax revenues for the government."

($1 = 3.3414 reais) (Reporting by José Roberto Gomes Writing by Ana Mano Editing by Chizu Nomiyama)