Feb 20, 2020
Farmers in Argentina Contemplate a General Strike
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Representatives of various farm organizations in Argentina are not happy about the early decisions taken by the Fernandez Administration that assumed power last December 10th. They are particularly upset about tax policies and as a result, they are contemplating a potential strike to express their displeasure.
One of the first actions taken by the new administration was to increase export taxes on soybeans, corn, and wheat. The new administration increased the soybean export tax to 30% from the previous rate of 24.7%. The export tax for corn and wheat was set at 12% compared to the previous rate of 6.7%. Additionally, the Argentine Congress has given the administration permission to increase the taxes another 3% if they feel it is necessary.
Many observers feel that if the administration exercised its option to increase the export taxes an additional 3%, it could trigger the farmer protests and they would stop selling their products. During previous protests, farmers also stopped selling their products and the government threatened to confiscate the farmers' grain, but the government never followed through with their threat.
Argentine farmers continue to be very frustrated by low commodity prices and high taxes. They felt that things were going to improve when former President Macri significantly reduced the export taxes, but in the face of an economic meltdown in Argentina, he was forced to increase export taxes once again in order to generate more revenue. President Fernandez is now facing an even more dire economic situation with the government unable to service its debts of over 100 billion dollars in addition to a 50 billion dollar load from the International Monetary Fund.