Future of Argentina’s farmers uncertain under new government

By Asia Sherman

- Last updated on GMT

© Getty Images / Vepar5
© Getty Images / Vepar5

Related tags: Argentina, Farmers, Agriculture

Argentine farmers continue to wait for answers as a new populist government prepares to take office next month.

“We have to wait for Alberto Fernández's administration to begin and find ways to boost agricultural production,” ​Jorge Chemes, Vice President of the Argentine Rural Confederations, told FoodNavigator-LATAM. “For now, all we can do is believe.”

Fernández, who ran on a left-leaning Peronist platform that pledged to pull Argentina out of economic crisis and restore the social safety net, defeated incumbent Mauricio Macri with 48% of the vote.

Macri, however, retained broad support in the country’s agricultural heartland, a central swath that stretches from Mendoza to Entre Rios. During his administration, business-centric policies expanded exports, pushed Argentina towards global markets and attracted foreign investment to improve infrastructure for the country’s grain belt.

All of this now hangs in the balance. A major global supplier of soybeans, corn and wheat and the world’s top exporter of soymeal livestock feed, the farming sector is the country’s main economic engine and source of foreign currency. Farmers fear that Fernandez will restore interventionist policies to combat soaring inflation, service billions in foreign debt and pay for promised social programs.

“With government coffers virtually empty, the administration will have to look for new opportunities to raise revenues,” ​says Monica Ganley, Principal of Quarterra Consulting & Advisory, a global strategist for the food and agriculture industries. “And as it seeks to levy additional taxes, agriculture will be a top candidate to shoulder this load.”

Ganley adds that government tax hikes are harmful to long-term agricultural productivity and also warns of the potential negative implications of raising tariffs in the face of diminishing margins, withdrawing from markets and pulling investment in public works.

Proposals from the field

In the run-up to the election, Fernández met with leaders from the agricultural sector to assure them that his government would provide a fresh start, distancing himself from the controversial export taxes imposed by his running mate, former president Cristina Fernández de Kirchner during her 2007 to 2015 term.

At the meeting, farmers presented Fernandez with a 14-point proposal, outlining a roadmap to increase production through innovation and financing to promote competitiveness in domestic and global markets. The proposal called for eliminating export duties on all products, noting that these restrictions fail to consider profit margins, discourage investment and reduce the competitiveness of exports.

“It is not possible to return the distorted regulations that existed in the past that generated harmful or negative effects on the sector,” ​Carlos Achetoni of the Argentine Agrarian Federation told reporters after congratulating Fernandez on his victory. “We have to move towards a virtuous state, a public-private participation that provides transparency to the markets in order to generate an equitable distribution of income.”

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