Argentina-New farm tax proposal looks good.

ARGENTINA.

TAX ON SOY.

A group of lawmakers in Argentina, have presented a bill that would exempt farmers from the hefty soy tax, if they use the savings to invest in the farm by way of new tractors and harvesters that are made in Argentina.

Falling global grain prices, have cooled the demand for tractors and farm equipment in general, which will result in job losses if not stopped.

National Deputy for Cordoba Mario Ardid, said "A collapse in the demand for farm machinery will devastate many small rural towns, who are dependent on the industry. If the industry has to close its doors, that will be the end of many small rural communities".

Backers of the scheme, include some of the well known backers of President Christina Fernandez de Kirchner. The president has so far resisted ant change in the soy export tax, that stands at 35% of the export value.

The market for farm machinery is about US$I billion a year, 60% of this equipment is manufactured in Argentina.

Earlier this year, farmers staged a four month anti government protest, over the rate of the soy tax that was going to be increased to 42.5%.

Farmers in Argentina receive no subsidies of any kind in relation to exports, rather they are taxed at 15% on beef, 25% on wheat and corn and 35% of soy.