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Argentinian new economy chief leaves farm leaders uneasy

05 July 2022

Farm leaders worry over higher export taxes on agricultural goods

Argentina's farm sector leaders said on Monday they were worried about the naming of an economy minister who has close ties to Vice President Cristina Fernandez de Kirchner, reported Reuters. The latter pushed higher export taxes on agricultural goods when she was president from 2007-2015.

Former Economy Minister Martin Guzman announced his shock resignation on Saturday, muddying the ailing economic outlook with inflation raging and massive debt obligations. 

Center-left President Alberto Fernandez tapped Silvina Batakis to replace Guzman on Sunday, with the new minister seen as closer to Fernandez de Kirchner and her advocacy for more public spending and other interventionist economic policies. 

Batakis was sworn in on Monday and quickly moved to calm markets. "I believe in fiscal balance and I think we have to move in that direction," she said.

During her stint as president, Fernandez de Kirchner pushed higher export taxes on agricultural goods plus other measures to safeguard domestic supply.

Argentina is a top global exporter of soybeans, corn and wheat.

Export taxes on corn and wheat stand at 12%, but the government has left open the possibility of raising them, after it earlier this year hiked export taxes on soybean oil and meal from 31% to 33%.

Batakis previously served as economy minister for populous Buenos Aires province from 2011-2015.

"We're interested in knowing the plans and agenda for solving the problems farmers have," said Nicolas Pino, head of rural association SRA. "Hopefully tomorrow the new minister will tell us."

A senior official with another key farm group, rural confederation CRA, went even further in reacting to the ministerial shake-up.

"Everyone to the life boats... women and children first!!!" wrote CRA Vice President Gabriel de Raedemaeker on Twitter, suggesting that the economy is drowning.

Argentina's closely watched black market peso weakened on Monday to around 267 per US dollar, more than double the controlled official exchange rate, while equities and bonds, already in distressed territory, lost more ground. 

"We hope there aren't any more harmful interventions on exports," said Gustavo Idigoras, head of the CIARA-CEC grains chamber.

Source: Reuters



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