President Threatens to Raise Taxes on Farm Exports in Argentina
(Bloomberg) -- President Alberto Fernandez of Argentina, one of the world’s powerhouse food suppliers, is threatening farmers with a tax hike or quota for exports as he seeks relief for families grappling with inflation that’s forecast to reach 47% this year.
If the farm industry continues to sell food at home for the same prices at which it exports, the government will take matters into its own hands, Fernandez told newspaper Pagina|12, providing beef as an example. Sales abroad of Argentina’s famed red meat are at a record, fueled by China, while domestic consumption is slumping.
“If they don’t hear me, I’ll be forced to solve the problem myself, and they can’t say they weren’t warned,” Fernandez said.
Surging global prices for crops and a steady depreciation of the Argentine peso mean farmers are receiving huge sums for exports, but Fernandez said he won’t tolerate the same dynamic locally.
As soon as it became clear that Fernandez’s leftist party, which has a penchant for market intervention, was going to take office 14 months ago, Argentine farmers feared food protectionism.
The crop rally -- and perhaps a move by ally Russia to tax grain exports -- emboldened the government to take action several weeks ago. It banned shipments of corn, used as feed by livestock producers, but later backtracked because of farmer backlash while insisting it would find a way to decouple international and domestic prices.
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