partnering for the future Solae, the 2003 effective tax rate was 33%. Our effective tax rate is affected by the geographic locations in which we do business, movements in foreign exchange rates and U.S. tax incentives  on export sales. The primary causes of the increased effective tax rate in 2003 were the effect of a stronger Brazilian  real , and increased net tax expense of $23 million due to new tax laws in South America and reduced tax benefits on U.S. export sales. In 2002, our income tax expense was reduced by a $20 million tax credit relating to the refund of prior years’ tax benefits on U.S. export sales. Included in our inventories were readily marketable inventories of $1,264 million at December 31, 2004 and $1,846 million at December 31, 2003. Readily marketable inventories are agricul- tural commodity inventories, financed primarily with debt, which are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. The decrease in readily marketable inventories  was primarily due to lower levels of inventory and a decrease in commodity prices compared to December 31, 2003. Net Income Net income increased $156 million to $411 million  in 2003 from $255 million in 2002. Net income for 2003 includes the $111 million gain on sale of our Brazilian soy ingredients business to Solae. Net income for 2003 also included an after tax gain of $16 million relating to the curtailment of certain pension and postretirement healthcare benefit plans and $40 million of after tax impairment charges on long-lived assets in Europe. Secured Advances to Suppliers and Prepaid Commodity Contracts We provide financing services to farmers from whom we purchase soybeans through prepaid commodity purchase contracts and advances to farmers. These arrangements are typically secured by the farmer’s crop and mortgages on the farmer’s land and other assets, carry a market interest rate, and are typically settled through the delivery of the related crop to us upon harvest. At December 31, 2004, we had $932 million in prepaid commodity purchase contracts and advances to farmers compared to  $611 million at December 31, 2003. The increase is primarily  due to the growth in Brazilian crop production and higher cost of fertilizer, seed, crop chemicals and other inputs. The allowance for uncollectible advances totaled $43 million and $31 million  at December 31, 2004 and 2003, respectively. In 2003, discontinued operations included a loss of $7 million, which included an environmental expense of $3 million, net of tax, related to discontinued operations we sold in 1995 and a  $2 million, net of tax gain, on the U.S. bakery business sold in December 2003. In 2002, discontinued operations included income of $3 million related to the 2003 bakery sale. Long-Term and Short-Term Debt We conduct most of our  financing activities through a centralized financing structure, designed to act as our central treasury, which enables us and our subsidiaries to borrow long-term and short-term debt more efficiently. This structure includes a master trust facility, the  primary assets of which consist of intercompany loans made  to Bunge Limited and its subsidiaries. Bunge Limited’s wholly owned financing subsidiaries fund the master trust with long and short-term debt obtained from third parties, including through our commercial paper program. Net income in 2002 included $5 million of after tax impairment charges on long-lived assets and charges recorded as cumu- lative effects of changes in accounting principles of $14 million, net of tax, representing the write-off of goodwill in the milling products segment as a result of the adoption of SFAS No.142, Goodwill and Other Intangible Assets, and $9 million, net of tax, related to the adoption of SFAS No.143,  Accounting for Asset Retirement Obligations. Our primary financial objective is to maintain sufficient liquidity through a conservative balance sheet that provides flexibility  to pursue our growth objectives. Our current ratio, defined as current assets divided by current liabilities, was 1.71 and 1.63  at December 31, 2004 and 2003, respectively. To finance working capital, we use cash flows generated from operations and short-term borrowings, including our commercial paper program, and various long-term bank facilities and bank credit lines, which are sufficient to meet our business needs.  At December 31, 2004, we had approximately $1,900 million  of committed borrowing capacity under our commercial paper program, other short-term lines of credit and long-term credit facilities, all of which are with a number of lending institutions. Of this committed capacity, $1,496 million was unused and Cash and Readily Marketable Inventories Cash and cash equiv- alents were $432 million at December 31, 2004 and $489 million at December 31, 2003. liquidity and capital resources 41