Good News: Argentine Agricultural Export Tax Defeated
Earlier I posted on my reactions to the standoff between Argentine farmers and the government over a proposed export tax on grains of around 40%. Given the widespread reporting on the “food crisis” I have been amazed how little attention has been paid to this conflict which has, or now had, major implications for the world food supply.
Well, yesterday after a protracted debate the Argentine Senate refused to sign the agricultural export tax into law.
This is great news for Argentina which was on the verge of destroying its most productive industry. And it’s great news for the rest of the world because this major source of basic grains and soy won’t dry up. Soy futures fell immediately.
Here’s a Wall Street Journal report on the Argentine farmers’ struggle. And here’s an account of the reaction of the market to the news of the Argentine farmer’s victory.
Dear Rachel, after 2 years from your post, I regret to say this problem with the taxes and the farms´production still continues. I´m not really afraid for estancias´ owners, they are still wealthy. Worst of all is life for small production farms. Usually, the owners have a low income from the harvests and they have the obligation to respect a maximum price, that sometimes do not cover their expenses. I´ve seen farmers leaving the grapes rotten instead of picking them up, they couldn´t even afford the labor. We can´t blame on them, they have no choice. By the way, ¨cacerolazos¨ began during De La Rua´s presidency, it was a way to make the authorities to listen to the people.
Thank you for your interest in my country, after all, it´s really beautiful and I miss it :)
Myriam
Agricultural policy is so, so tricky. Thanks for bringing me up to date. I look forward to lots more interaction.