This is the first major conflict with the agricultural sector, the most dynamic in the Argentine economy, which Alberto Fernandez has to face. The center-left president, in power since December 2019, had to face a strike launched by the big employers' federations of farmers from Monday 9 to Thursday 12 March.
The cessation of the marketing of seeds, cereals and livestock has been "Very followed", according to the four organizations that supported the movement. This follows the government's decision to set up a new system of retenciones, export taxes, which notably plans to lower the tax rate on foreign sales of producers of more than 1,000 tonnes of soybeans per year from 30% to 33%. At the same time, export taxes on those producing less than 1,000 tonnes (nearly 75% of producers) will be reduced or capped at 30%.
Debt restructuring
Nicknamed "green gold", soybeans – most often transgenic, designed by Monsanto – and its derivatives, a flagship product of Argentine agriculture, represent more than a quarter of the country's exports. Argentina is the world's largest exporter of flour and soybean oil. The new government had already raised taxes on soybean exports in December 2019, from 24.7% to 30%, regardless of the size of the farm.
While Argentina ended 2019 with a recession – with a 2.1% contraction in gross domestic product – and the government is in the middle of negotiations to restructure the debt with the International Monetary Fund and the private creditors of Buenos Aires , this new measure aims to better redistribute wealth within the agricultural sector and generate tax revenue.
"This decision will have negative consequences (…), denounces Jorge Chemes, president of the Argentine Rural Confederations (CRA), one of the organizations calling for the strike. The agricultural sector has been overtaxed for years. Profitability has dropped significantly, and this situation becomes unsustainable for many small and medium-sized producers, who must sell their land and abandon their activity. "
"One step closer to redistribution"
The Argentine president, for his part, deplored "The intolerance of those who do not understand and sometimes launch strange strikes". His predecessor, the liberal Mauricio Macri (2015-2019), was hostile to export taxes, which he had abolished (or reduced, in the case of soybeans) as soon as he came to power, before reinstating them in September 2018, shortly after the outbreak of a serious economic crisis.
