Some Argentine farmers call sales strike to protest tax hike
The government on Thursday increased export levies on soybeans, soymeal and soyoil to 33% from a previous 30%. The move was part of President Alberto Fernandez’s plan to make the country solvent after announcing it will have to revamp about $100 billion in what it calls unsustainable debt.
The Rural Confederations of Argentina, or CRA, said the strike would apply only to members of the group, which is one of four growers’ organizations in the grains exporting powerhouse.
“Sales will be suspended for four days starting on Monday,” a CRA spokesman told Reuters hours after the CIARA soy crushing companies chamber warned the tax increase would give an advantage to Argentina’s international competitors at a time when the country most needs export dollars.
CIARA, representing export giants like Bunge and Louis Dreyfus, wants industrialized products be taxed at a lower rate than beans because they are more expensive to make.
Argentine wheat exports, for example, are taxed at 12% while wheat flour is subject to a 7% levy. Sunflower seed exports get taxed at 7% while sunflower pellets, used as food at fish farms, are taxed at 5%.
But, as the cash-strapped government looks to increase revenue ahead of what are expected to be tough bond restructuring talks, it is the soy sector that offers the juiciest tax take. Argentina is the world’s No. 1 exporter of soymeal livestock feed and soyoil, used in making biofuels.
“CIARA understands that the government is facing the challenge of making its external debt sustainable, but we are convinced that this must be done logically and while defending national industry,” the statement said.
“Competing countries are celebrating this measure because it may remove Argentina from some soymeal and soyoil export markets while increasing the export from Argentina of unprocessed beans,” it said.
Most Argentine soybeans are processed into oil or meal before export. Growers in the country are expected to produce 54.5 million tonnes of soybeans this season, according to the Buenos Aires Grains Exchange. Harvesting starts this month.
Argentina prizes the huge soy crushing plants that dot the banks of the Parana River around the export hub of Rosario, because they provide employment and industrial activity that would not exist if the country concentrated on the export of raw beans.