April 10, 2013 / 10:36 PM / 7 years ago

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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