Paraguay's lower house rejects tax on soy exports
ASUNCION, April 10 (Reuters) - Paraguay's lower house of Congress voted down a bill on Wednesday that would have put a 10 percent tax on soy and other grains exports, responding to concerns from farmers in the world's No. 4 soybean supplier. Lawmakers said the proposal would only hurt growers while benefiting multinational companies that dominate the grains trade from the poor, landlocked South American nation. Members of the Senate, where the bill was passed in December, said it was aimed at supporting the nascent soy-crushing industry by encouraging shipments of value-added products such as soymeal and soyoil. "The multinationals will pass along this cost to farmers. With this bill we would be destroying the production that sustains Paraguay's economy," lawmaker Luis Gneiting of the opposition Colorado Party said during the debate. Gneiting is running for governor of one of Paraguay's main soy-producing regions in an April 21 general election in which voters will also elect a new president. His party had supported the bill's passage in the Senate. Paraguay is on track to produce a record 8.4 million tonnes of soybeans this season, trailing far behind the world's top three soy suppliers. Companies such as Archer Daniels Midland Co , Bunge Ltd and Louis Dreyfus are investing in crushing factories. The bill rejected on Wednesday contemplated a tax on soy, wheat, corn and sunflower exports. Lower house lawmakers said they would consider a change to the levy on farm earnings instead, a move supported by ruling-party presidential candidate Efrain Alegre.
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