3 December 2021

2 minute read

South America

Argentina's government is preparing a farm sector roadmap for the next two years which it will present to producers next week, reported Reuters. The government hopes to ease conflicts with the sector over caps on meat exports and grains.

Argentina is the top global exporter of processed soy, the second in corn and a top-five beef producer. In the past year it has suffered regular protests from the farm sector and workers, which have at times affected production and shipments.

A temporary cap imposed on corn exports early in the year, threats to raise taxes on wheat shipments and a strict limit on beef exports to rein in inflation fanned tensions in the sector, the main export driver and source of much-needed foreign currency in the South American nation.

Gabriela Cerrutti, a presidential spokeswoman, said at a news conference that technical teams from the government and industry will meet before Minister of Agriculture Julián Domínguez shares the proposal with farm leaders next Thursday.

"What he is going to present is the 2022/23 plan for the entire sector, for corn, for wheat and for meat," said Cerrutti, adding that "all measures are going to be discussed in a timely manner, first of all with the sector."

Argentina's Peronist government faces a tough balancing act trying to keep farmers from revolting while meeting consumers' demands for affordable food amid inflation running at an annual rate of more than 50%.

The center-left administration of President Alberto Fernandez also sorely needs farm export dollars to replenish depleted currency reserves and to pay off debt amid talks to delay $45 billion it owes the International Monetary Fund.

The presidency underscored that the meeting next week would be to develop a plan "through dialogue" rather than a unilateral decision. Cerrutti also said it would not include any legislation that would need the approval of Congress.

That would indicate that the roadmap does not include plans to hike taxes on soy, corn and wheat exports, which at current levels would need lawmakers' approval to be raised further.

Elbio Laucirica, president of CONINAGRO, one of the main rural associations, told Reuters his group wanted the government to fully end caps on beef exports.

"If we want to generate trust and investment, we cannot be intervening in the markets," Laucirica said.

A source from the Argentine Rural Society, another major farm group, said its demand would be "that exports be freed up."

Source: Reuters