The Argentine government will focus on boosting production and exports of value-added agricultural products, President Alberto Fernandez pledged Monday in his inaugural speech to the ordinary sessions of the country’s new Congress.
“We are going to promote agroindustrial production with tax incentives and predictability, to stimulate investments in the sector, generating more employment and more added value,” Fernandez said, highlighting that the advantages would likely be targeted at more valuable products rather than core grains or oilseeds.
“That is why we reduced export duties for industrial production,” he said, adding that the new export duty scheme will offer lower duties to any value-added products.
Last year, the government modified the export duty scheme and implemented a gradual cut with the aim of boosting exports.
Following the three-month reduction plan, soybean export duties for largest producers now stand at 33% while export duties for soymeal and soyoil are at 31%.
Prior to these modifications, all exports in the soybean complex paid a similar level of duties, with the pledge coming as Argentina looks to bolster government coffers slammed by pandemic, rampant inflation and the poor state of the economy.
Tensions between the rural sector and the left-wing ruling coalition Frente de Todos have been running high following a recent threat by the government to increase export duties for certain grains if the trade did not deliver mechanisms to curb the impact of rising global food prices on Argentinian consumers.
Currently the export duty for wheat and corn is set at 12%, but under Argentine law the government can establish a maximum export duty for cereals of up to 15%, meaning that the government still has room to increase duties for these grains by up to three points.
However, following a meeting between President Fernandez and the country’s four main rural lobbies, the government removed the threat of higher duties.
