Soy and the old habit of hunting in the zoo

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Finally, the national government ordered that soybeans – the crop that generates the most foreign currency in the country – pay a withholding tax of 33 percent.

In exchange, it offered that 42,406 producers, who represent 23 percent of the production and who produce between 100 and a thousand tons, pay staggered aliquots between 21 and 30 percent.

In total, according to the Government, 14,884 producers, who contribute 77 percent of the country’s soybean production, will pay 33 percent.

The decision to raise the tax, which had the rejection of the Liaison Table that makes up the agricultural union entities, was contemplated in the Law of Social Solidarity and Productive Reactivation, sanctioned by the National Congress at the end of last year.

The segmentation mechanism was previously used to compensate producers and its results were not satisfactory.

It happened both under the government of Cristina Fernández de Kirchner, through the National Office of Agricultural Commercial Control (Oncca), and under the administration of Mauricio Macri, through the Belgrano Plan.

With the new tax scheme, the Executive Branch will seek to squeeze, once again, as if it were a citrus, the oilseed that over the years has been losing competitiveness.

Since 2002, when the States restored the withholdings, soybeans were the standard bearers of the tax.

It started with 13.5 percent, went up to 35 percent and had an attempt to bring it to 45 percent, when the camp’s protest left resolution 125 first and then a bill that sought to establish a mobile withholding scheme.

Until 2008, soybeans seemed to have backs to absorb the voracity of a treasury that never had an adjustment of its structure among its plans.

Its international price, which was around $ 500 to $ 600 a ton, allowed him to make the effort. Not now, its value is almost half.

To the limit

Now the scenario is different. Its international price of $ 330 a ton changed its economic equation.

What’s more, grain market analyst Pablo Adreani says that with an aliquot of 33 percent, soybeans have a value for the producer of $ 219 per ton. That figure turns it into a deficit business to plant it in the remote areas of the ports.

While the government is stretching a decision that has already been taken for several days – without naming it, President Alberto Fernández himself made reference to the rise in the grain tax at the opening of ordinary sessions in Congress – the grain trade is paralyzed . Therefore, no foreign exchange is being generated.

According to the Chamber of the Oil Industry of the Argentine Republic (Ciara), the decision to keep the Registry of Sworn Declarations of Foreign Sales closed caused losses of around 180 million dollars.

The entity maintains that on the Paraná river there are a dozen boats waiting to be able to load soy beans, flour and soybean oil and corn.

If the delay is extended, Argentina is at risk of defaulting on those commercial contracts. However, on Wednesday the registration would be reopened.

Impact

With declining prices and the additional three-point rate, the new tax contribution required for soybeans would be around 500 million dollars. Very little for an economy that, in addition to funds, needs a restructuring of its public sector. A pending matter much older than the history of soy in Argentina.

But asking for a new effort from agriculture – in this case, from soybean producers – continues to be much easier for the State than facing its own adjustment and carrying out a comprehensive tax reform, with a broader sense of solidarity.

“If the adjustment starts at home?” This was reflected by the Rural Society of Jesús María through a statement in which they questioned the official decision that only agriculture should carry out a “solidarity” effort, while the political power continues without reducing its expenses.

The entity proposes to focus on other sectors that are generally not recipients of any adjustment.

He argues that, if the purpose is to collect more, the State could well: reduce spending on subsistence allowances and salaries of advisers to the National Legislative Power, as well as reduce public spending on the parliamentary structure of the provinces.

In addition to increasing income from the payment of Income Tax by judges and judicial officials; and reduce the advertising spending of the Executive Branch.

As long as the effort is not shared, it is easier to continue hunting in the zoo.

Print edition

The original text of this article was published on 03/04/2020 in our printed edition.



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