After crunch talks, Argentina decides not to raise grain export taxes

RIO DE JANEIRO, BRAZIL – Argentina’s government has decided not to go ahead with proposals to hike taxes on farm exports or limit how much grain can be shipped abroad to curb rising food prices, after warnings from farmers that they would protest the measures.

“We can convey to our producers that there will be no increase in export taxes and no intervention,” said Jorge Chemes, president of Confederaciones Rurales Argentinas (CRA), after leaving a meeting with Argentine President Alberto Fernandez.

Agriculture Minister Luis Basterra said the president was seeking to strike a deal with the sector to stabilize food prices.

“The president expressed a willingness to negotiate to resolve the problem, and to not apply the measures,” Basterra said following the meeting. He said the government’s goal was to ensure “affordable food for Argentine tables.”

A government source said any agreement was dependent on how the farm sector acted, indicating there was a degree of conditionality about holding down taxes.

Government officials had previously warned existing levies on farm exports – paid by export companies but passed down to producers – might be increased as the country struggles with consumer price inflation that hit 36% last year, and 4% in December alone.

In recent days, Fernandez outraged farmers by accusing them of being one of the main drivers of inflation. Chemes, the farm chamber leader, said producers in the meeting told the government that the problem lies with the supply chain, and not the farmers themselves.

“It was perfectly understood that our participation in the final price is low,” Chemes said. Chemes said farmers would meet more regularly to discuss the root cause of rising food prices.

Argentina is the world’s top exporter of soyoil and soymeal livestock feed. It is the No. 3 exporter of corn and is also among the leading international suppliers of wheat.