Buenos Aires | Reuters — Argentina will keep an eye on how much soy is being hoarded on farms throughout the country by requiring that the sales of silo bags be reported to tax authorities, according to a government resolution announced Monday.
The oblong industrial-strength plastic bags have come to dot the Pampas grains belt over recent years, as growers in the world’s No. 3 soybean exporting country hang on to stocks as a hedge against double-digit inflation.
The government, long at loggerheads with the farm sector over President Cristina Fernandez’s interventionist policies, has complained that soy hoarding is cutting into tax income. This is especially problematic for the government as it ramps up spending ahead of October’s general election.
“Sales of plastic silo bags directly to farmers or to third-party venders will be registered… every calendar month,” the resolution says.
“What it aims to do is collect information about the universe of buyers of silo-bags, to have buyers clearly identified,” Ricardo Echegaray, the head of Argentina’s AFIP tax agency, told a news conference.
Argentina puts a 35 per cent tax on soybean exports.
“This resolution is an additional control meant to increase pressure on growers to sell the soybeans that they have in reserve. The government needs the money,” said local farm sector analyst Pablo Adreani.
Another new rule announced on Monday tightens reporting requirements on all grains transaction between farmers and buyers, as the government seeks to keep a closer eye on the movement of strategically important crops such as soy and corn.
The agriculture ministry has estimated Argentina’s recently harvested 2014-15 soy crop at a record 58 million tonnes, up from 53.4 million tonnes in the previous season. The U.S. Department of Agriculture forecasts Argentina’s soy harvest this season at 56 million tonnes.
— Hugh Bronstein reports for Reuters from Buenos Aires. Additional reporting for Reuters by Maximilian Heath.Tagged argentina, silo bags, Soybeans