BUENOS AIRES, Oct 2 (Reuters) – Argentina’s main farm association said on Friday that government measures to cut export taxes on grains were inadequate and failed to address issues facing local farmers amid a grave economic crisis and strict capital controls.
The center-left government said on Thursday it would reduce the export levy on soybeans, soymeal and soyoil by 3 percentage points to 30% to stimulate stalled sales and bring in much-needed foreign currency.
Farmers in Argentina, the world’s top exporter of processed soy, have held back on selling their soy harvests, a concern for the government as foreign currency reserves dwindle amid the coronavirus pandemic and low confidence in the peso as the country heads for its third straight year of recession.
Argentina is also just emerging from a sovereign default after restructuring over $100 billion in foreign currency debt.
The Liaison Commission of Agricultural Entities, which incorporates the four main farming bodies, called the government’s plans “insufficient” and “isolated measures, which look like patches” rather than a comprehensive strategy.
“The lack of dollars is a consequence of the terrible export policies that have been taken, looking only at tax collection and discouraging growth of exportable production,” it said in a statement, adding it had not been consulted on the measures.
Argentina’s powerful farm sector has clashed with various governments before over taxes. Current President Alberto Fernández resigned from his position as then chief-of-staff in 2008 amid a fierce dispute with the industry over tax hikes.
The farm body said that the temporary reduction of some taxeswas of little help to farmers themselves, who have said many of the benefits will be soaked up by grain processors rather than growers.
Argentina is the world’s largest exporter of soybean meal and oil, the third largest of unprocessed soy beans and one of the most important sellers of beef, corn and wheat.
(Reporting by Adam Jourdan and Nicolas Misculin; Editing by Steve Orlofsky and John Stonestreet)
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