The Argentine countryside is at war again. The producers protested this Wednesday on the highways and paralyzed the commercialization of cereals, oilseeds and cattle for 24 hours. They demanded from the government of the Peronist Alberto Fernández a reduction in taxes, in addition to access to foreign currency to buy fertilizers, tires or spare parts for machinery. They say that the tourniquet that the Executive imposed two weeks ago on access to dollars for imports is suffocating them. And they add to the list the taxes they pay for exporting. For the Executive, on the other hand, the protest was “a political strike by the bosses that makes no sense.”
The government knows that it is facing a deeply anti-Peronist sector. The memory of the 2008 blockade is still fresh, when producers from all over the country managed to get President Cristina Kirchner to reverse an increase in export tariffs. The “crisis of 125″, as it was called due to the number of the failed law, created a mystique of protest that crystallized in the Liaison Table, where the four main chambers of the agricultural sector are grouped. That same Liaison Table is the one that now confronts the Casa Rosada again.
“This a cry of despair. The field does not give more”, said Jorge Chemes, president of Argentine Rural Confederations (CRA), during the central meeting of the protest, organized in the province of Entre Ríos, the heart of the country’s soybean basin. “Not only because of the tax pressure, but also because of the pressure that is felt due to the lack of policies. There is uncertainty and mistrust,” he said. The Argentine countryside has always felt victimized by the avidity of a state that he accuses of being inefficient and corrupt. And the relationship with Peronism has historically been conflictive. At the base is the import substitution model that since the fifties of the last century supposes financing industrialization with the surpluses produced by the land. The field is also the main source of foreign exchange for Argentina.
Six out of every ten dollars that enter the South American country for exports are the responsibility of the countryside. The figure reached 48,388 million last year. Only soybeans represented 30% of that total in 2021, followed by corn, with 12%. To keep part of that income, the State applies a 33% export withholding to soybeans. A study by the Agricultural Foundation for the Development of Argentina (FADA), determined last March that when all taxes are added, 64% of the income of producers goes to the treasury. The Government is now going through a serious fiscal crisis due to lack of dollars, but has not decided on a new tax increase. The protest this Wednesday was, in any case, preventive.
The trigger was the shortage of diesel for the transport of merchandise and agricultural machinery. Argentina is a net importer of this fuel. The spike in international prices, as a result of the war in Ukraine, and the start of the heavy harvest produced a bottleneck in supply. 23 of the 24 Argentine provinces ran out of diesel two weeks ago, but as a result of an aggressive import policy, the situation gradually tended to normalize. The gas oil arrived at the stations, but the call for the strike was maintained. The underlying issue is much more complex than a fuel load, producers warn.
“The countryside is seen as a source of fiscal resources, as something that is only used to collect money,” Chemis complained. Rebuilding trust will be very difficult. The government spokeswoman, Gabriela Cerruti, said that the strike was a political issue, without economic foundation. The chief of ministers, Juan Manzur, assured that “the strike does not lead to anything.” There are years of accumulated mutual grudges behind.
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