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ARGENTINA | 25-02-2020 18:51

Producers warn government over plan to raise soy duties by 3%

The government of Alberto Fernández would increase in the coming days three percentage points to the retention of soybeans and their derivatives, which is why the agricultural producer organisations anticipated the possibility of force measures.

Alberto Fernández's government will increase export duties on soybeans and their derivatives by three percent in the coming days, a move that looks set to prompt strong pushback from agricultural producers and lobby groups.

The policy, first trailed by the El Destape news portal a few days ago, will reportedly form part of a move to recoup funds for the Treasury amid Argentina's recession and economic crisis, with poverty said to be nearing 40 percent by watchdogs. The Peronist leader is expected to confirm the move in his upcoming speech to Congress on March 1, during which he will call for "solidarity" from the nation's most dynamic sectors, the website reported.

If realised, the move would see the government raising soybean taxes by three percentage points to the maximum level of 33 percent authorised under the Economic Solidarity and Productive Reactivation Law, which was approved during the initial days of President Fernández's government at the end of last year. This legislation also allows for a rise in duties on corn and wheat to 15 percent, from the current 12 percent.

Agricultural leaders and producers were quick to criticise the news, threatening that they would adopt "more protest measures,” including the cessation of "commercialisation" in response.

In an interview with Radio Rivadavia, the head of the Argentine Rural Confederations (CRA), Jorge Chemes, declared: "We definitely would not support an increase to 33 percent on soybeans. If the government finally announces 33 percent, the decision will be to move forward with more protest measures, and the commercialisation of soybeans will cease."

Measures

The sector's ‘Mesa de enlace’ ("Liaison Committee") – made up of the heads of the Agrarian Federation, the Rural Society, the Argentine Rural Confederations and Coninagro – says it is seeking compensation for existing duties as they are now, which were raised to 30 percent following last year's change of government.

The President of the Agrarian Federation, Carlos Achetoni, said it was "a possibility" that industry leaders would decide to adopt forceful measures in response to a rise in duties.

"I don't think they have the same parameters as in 2008 [a reference to clashes between the Cristina Fernández de Kirchner administration and the sector] – if at that time there were 10 points of difference in duties, but soy was practically double [in terms of price], so these three points are very significant," he added.

"The scale itself complicates the small producer. Usually, our producers have 40 or 50 hectares of their own and gives them scale by renting or leasing about 100 hectares more. But the number is quite tight and that three percent gross ends up affecting profitability. And if it is a producer who is far from the port ... it goes into negative numbers," analysed Achetoni.

In statements to Radio La Red, he concluded that "obviously, if there is no differentiated treatment it will be very difficult for us to calm our own representation of more complicated producers."

- TIMES/NA/PERFIL

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