“If the campo [l’agriculture] is doing well, the country is doing well. “ The adage, well known in Argentina, reveals the importance of the agricultural and agrifood sectors, which in 2018 represented more than 60% of Argentina’s exports and almost 10% of the gross domestic product. Agriculture is one of the main engines of the economy of this immense State whose arable land extends well beyond the Pampa humeda, this large fertile area which crosses six provinces in the center of the country.
Good news for the sector: 2021 has started with a sharp rise in the prices of raw materials, and in particular soybeans, of which Argentina is the third largest producer in the world. But this year also opened with strong tensions between the government and the big agricultural producers, scalded by the rumor of a possible increase in taxes on exports.
The government – which did not respond to multiple requests from the World – faces a dilemma: on the one hand, it sorely needs foreign currency obtained through exports, in order to cope with the crisis that Argentina is going through and while it is in the midst of renegotiating its debt with international creditors, IMF on the front line. On the other hand, the authorities want to avoid a surge in prices on the internal market, in a country that is unable to get rid of its double-digit annual inflation rate.
Backpedaling
Export taxes are the source of an almost permanent showdown between producers and the state. They currently stand at 33% for soybeans and 12% for corn and wheat. “The agricultural sector is only seen by the government as a source of tax revenue, and not as a sector that can generate more resources for Argentina, especially through exports ”, denounces Jorge Chemes, president of the Argentinian Rural Confederations (CRA), one of the main agricultural federations, and one of the most combative.
“Producers cannot sell [des aliments] to Argentines at the same price as internationally ”, center-left president Alberto Fernandez said in an interview with the newspaper Pagina / 12 published on February 7, threatening to increase export taxes to encourage the agricultural sector to direct more of its production to the domestic market and, ultimately, to lower prices.
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