ARGENTINA-FARMERS DISPUTE.
Cordoba and Santa Fe, two big farming provinces in Argentina, are calling on the national government to suspend crop export taxes for three to six months to help farmers in the face of the worst drought in decades.
Cordoba Governor Juan Schiaretti is suggesting a three-month suspension in export taxes followed by a five to 10 percentage point cut in the rates, which run as high as 35% on soybeans, according to local media reports Monday.
"The international context is not the same as when there was the exporting bubble," Cordoba Agriculture Minister Carlos Gutierrez told the newspaper Clarin. "Today the farm is living another reality, so we should adapt ourselves to this reality. We have told (Argentine President Cristina Fernandez de Kirchner) that a cut in the export taxes on soybeans will help put back on track the productive wheel" of the sector.
Sunday, Santa Fe Governor Hermes Binner suggested he will ask the national government to suspend the export taxes on beef, cereals, milk and oilseeds for six months, the local press reported.
He also wants the Fernandez government to eliminate the value-added tax on basic agriculture-based products like beef, bread, chicken, eggs and milk to boost consumer demand and help increase sales in the drought-beleaguered sector.
Argentina is suffering its longest dry spell in decades, with many parts of the farm belt so far this year posting the lowest precipitation in 47 years. The reduction has been between 40% and 60% as compared with historic averages, according to the Buenos Aires Cereals Exchange.
According to the latest estimates, the farm sector has lost $2.7 billion in crops and other products because of a cut in planted area and lower crop yields, as well as slower fattening rates and the death of an estimated 600,000 heads of cattle.
Many agriculture analysts expect the total harvest for the 2008-09 season to come in at 80 million metric tons, down from 95 million in the previous season.
For soybeans, the country’s biggest crop, the drought has led to regular cuts in production estimates, with the latest from the Buenos Aires Cereals Exchange suggesting output from the 2008-09 crop may drop by 17% to 25% to between 34.5 million to 38.2 million tons from 46.2 million tons out of the 2007-08 season.