(Bloomberg) -- Facing a sell-off of the peso, President Mauricio Macri was hoping Argentina’s biggest source of dollars would show up to return a favor. Instead, he got a slap in the face.
Macri bet big on farmers when he came to power in December 2015, scrapping export taxes, devaluing the currency and subsidizing loans to reverse the hostile policies of the previous government. But now, when he desperately needs their export dollars, they aren’t selling enough soybeans.
Farmers have sold 17 million metric tons of the current harvest, according to data from the Agriculture Ministry, which estimates the crop at 37.6 million. Recent sales have been slow. In the past month, through May 2, growers sold just 2.6 million tons of beans, compared with 4.7 million in the same period last year.
There’s no sign they’re prepared to let go of millions of tons of beans stockpiled from the previous harvest, either. Argentine farmers generally have more confidence in the physical commodity than their nation’s unpredictable economy and currency. The invention of the silo bag -- something that was derided by supporters of Macri’s predecessor, Cristina Fernandez de Kirchner -- has also given farmers the ability to store beans and wait for a favorable exchange rate and crop prices.
A prominent member of Macri’s coalition, lawmaker Elisa Carrio, vented her anger. In a tweet last week, she told farmers, “We helped you in the tough times ... Now, I say to you: ‘Don’t hold back the soy, start selling so dollars come in.’ ” In televised remarks, she added: “Do it for the fatherland.”
But farmers are unlikely to do that until the end of volatility in the currency market. “We have to sell at the best price, and now is not the right time to make that call,” Francisco Perkins, who farms about 7,000 hectares (17,300 acres) of soy, said in a phone interview from Pehuajo in Buenos Aires province.
Compounding farmers’ preference to ride out the currency storm, sales have been slowed even further by a deluge that has postponed the harvest.
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