Elimination of export taxes puts Argentina on new course

Argentinian farmers will soon breathe a sigh of relief, as the government aims to drop taxes on the export of agricultural commodities, though the move is raising fears that a flood of products on the market will push global prices even further.

In March 2015, Fernandez introduced exports taxes on cereal and oilseed crops in the name of benefiting tens of thousands of small and medium-sized producers of soybeans, corn, sunflower seed, and wheat.

A version of this article appears in print on December 15, 2015 of The Himalayan Times.

Argentina is the world’s third-largest producer and exporter of soy, after the United States and Brazil, and vies with Ukraine for the title of third-largest corn exporter.

Export tariff on soybeans will now be 30 percent. He also said that a 35 percent tax on soya exports will be cut by 5 percent a year.

The country estimates that farmers had been holding on $11.4 billion worth of corn, soybeans and wheat. “As of today there will be no more taxes withheld on industrial exports”, Macri told the Argentine Industrial Union. The Argentine president has already promised to treat investors equally – unlike Kirchner, who was known to change laws suddenly and also took populist stances against foreign investors.

Macri urgently needs farmers to start exporting their hoarded crops, which are a key source of hard currency for the central bank.

According to Macri’s Minister of Production Francisco Cabrera, scrapping the DJAI, which he characterized as an “abuse regime of pricing information and cost structures and profit margins demanded of companies”, will make way for a “more simple” trade system, local media reported.

Argentina’s economy is suffering from high inflation and a chronic budget deficit.

“We can double Argentina’s food production”, he said, calling for “more corn, more beef, everything we’re capable of”.

Exporters in both the industrial and agricultural sectors are pressing for a devaluation. The government has tightly controlled the peso exchange rate, now at 9.77 per dollar, compared with a black market rate of about 14.86.