Farm income and the risk of fat cows going skinny – Latest News, Breaking News, Top News Headlines

The fights between governments and the countryside always carry a similar logic. They usually occur at times when extra income appears, on the one hand, and a table that automatically seems half empty, on the other.

Rising international prices are always good news for Argentina, but among those who design public policies, they generate a drive that is difficult to repress: they become generators of an income that can be distributed among those who need it, be it a state that lacks dollars or pesos (or both) or producers that live under pressure from internal costs, bad financing and a consumer market that does not provide for everyone.

All the shoes of the government are tight. The loss of reserves prompted him to change the withholding scheme for agro-exporters, with the illusion that a temporary reduction in this tax would become an early settlement. The measure worked half, because the Executive had not resolved the other uncertainty bills and the exchange gap did not invite anyone to leave their dollars in the Central in exchange for pesos.

Then came a time of « indirect » dialogue, since with the argument of setting up a wider table, the Government chose an interlocutor of its liking. The Argentine Agricultural Council added exporters and marketers, liquefying the weight of the producers in its composition.

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During several meetings in which Martín Guzmán was also present, tax and health policies were discussed to create a long-term path. But then a strong spark jumped: almost 20 days of unemployment in ports that gripped the grain business, without the Executive showing enthusiasm in solving it.

After cardboard, the closure of corn exports came until March, driven by the prospect that international prices of grains used for raising poultry and livestock will end up pushing a sensitive product for the family basket a little more.

Behind all this there is a common factor: for several weeks the prices of Chicago, both for soybeans and cereals, show steady increases. The strong recovery in China, the limited stock in the American market and the risk of a Latin American drought are influencing.

The field fears for a new adjustment to the withholdings, and the Government, for an inflation that further unsettles the exchange horizon. That is why yesterday both parties found points of relaxation: the elimination of the export stocks in exchange for the commitment that the domestic supply of corn does not fall so that its price does not rise. To this was added the creation of a mechanism that compensates the gap between Chicago and the domestic value, something like a « Creole barrel » for cereal, with the State seeing how to neutralize the difference. The risk of interventionism, as always, is that the fat cow becomes skinny.

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