Argentina’s Macri ditches wheat, corn, beef export taxes

Port of Quequen, Argentina. (AntaresShipping.com)

Buenos Aires | Reuters –– Argentine President Mauricio Macri said he would sign a decree on Monday eliminating corn and wheat export taxes as part of his plan to revitalize the country’s massive farm sector after years of antagonism with the government.

The decree will also cut the export tax on soybeans, the country’s main cash crop, from 35 per cent to 30 per cent.

Argentina is a major producer of grains and livestock. The increased output expected to result from Macri’s policies would put downward pressure on world food prices, making it easier for people in poor consumer nations to eat.

A major plank of Macri’s campaign ahead of the Nov. 22 election was his promise to bolster agricultural production by cutting taxes imposed by previous President Cristina Fernandez.

Macri, who promises free-market solutions to Argentina’s long list of economic woes, defeated a candidate from Fernandez’s party. He took office on Thursday.

“Today, as I promised during the campaign, I am betting on the farm sector’s ability to increase production,” Macri told a group of growers gathered for the announcement. “As soon as I land in the capital city, I will sign the decree.”

The event took place at a farm in the town of Pergamino, in the heart of the Pampas grains belt in Buenos Aires province.

The 32 per cent tax on soymeal and soyoil exports was also to be cut by five percentage points. Growers said they expect the government to honour its promise to ditch Fernandez’s wheat and corn export quotas as well, maybe even as part of the same decree. No one from the government could be reached for comment.

The quotas, meant to ensure ample domestic food supplies, have pushed growers out of wheat and corn, resulting in the over-planting of soy on the Pampas over recent years.

Corn exports have been taxed at 20 per cent and wheat at 23 per cent. The decree will also eliminate a 15 per cent export tax placed on beef exports. Macri’s policies are expected to spark a big increase in crop rotation, which would help preserve soils and contribute to an increase in overall grains production.

Racing to grow more corn

Fernandez had feuded with the country’s growers since protests over her tax policies paralyzed the agriculture sector and rocked her government in 2008. After two terms in office, she left Argentina with inflation estimated at more than 20 per cent, a yawning fiscal deficit and low central bank reserves.

The government estimates the country’s grains production will grow to 130 million tonnes per year from the current 100 million tonnes during Macri’s first term, ending in 2019.

“We have been fighting for this for years,” said Pedro Vigneau, who manages 2,500 hectares of grains and cattle land in the breadbasket province of Buenos Aires.

“The government is now supporting the farmers, which is really new for Argentina,” he said. “Now the ball is in our field. We are responsible for increasing production.”

Argentina’s farmers are racing to grow more corn now that Macri has taken power, increasing the area planted by 10 per cent over previous estimates and making more exports likely from one of the world’s biggest suppliers. They can plant corn until mid-January, while wheat goes into the ground midyear.

More than 90 per cent of corn planted in Argentina is genetically modified. Sales of GMO seeds have jumped since the election, as have those of related chemicals and glyphosate and atrazine herbicides sold by Monsanto and other companies.

Hugh Bronstein reports for Reuters from Buenos Aires.

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