December 24, 2019 / 12:47 PM / a month ago

Argentine government talks with farmers about export tax relief

FILE PHOTO: Farmer Rodolfo Picchi drives a tractor pulling a sowing machine to plant sorghum in the town of Estacion Islas in Buenos Aires province, November 24, 2012. REUTERS/Enrique Marcarian

BUENOS AIRES (Reuters) - Argentine Agriculture Minister Luis Basterra has started talking with farmers about the possibility of applying lower grains export taxes to growers located farther from ports, a spokesman for the ministry told Reuters on Tuesday.

“It’s a possibility that will continue to be discussed in concrete terms between the government and the farming organizations that met with the minister yesterday,” an Agriculture Ministry spokesman told Reuters by telephone.

The new government, inaugurated two weeks ago, has signed a law raising the tax on soybean exports to 33% from about 25%, while international shipments of corn and wheat are taxed at 15%, up from about 7% previously.

Basterra met with farm leaders on Monday. He later told local newspaper La Nacion that a segmentation to export tax rates was under discussion. “We talked about multiple problems facing regional economies,” according to an article published by La Nacion on Tuesday.

“We have to improve the systems that were used in the past,” Basterra told La Nacion.

Growers are unhappy about the tax increases, saying they are adding to financial pressures caused by high borrowing costs in the inflation-racked country. Argentina is the world’s top exporter of soymeal livestock feed, and its third biggest supplier of corn and raw soybeans.

Most of Argentina’s farm exports are sent from the ports hub of Rosario, on the Parana River. Growers located in regions far from Rosario face higher ground transportation costs to get grains to the river, which leads out to the shipping lanes of the South Atlantic.

The province of Salta, for example, is a main agricultural producers in the northern part of Argentina, more than 1,000 kilometers away from Rosario.

Reporting by Hugh Bronstein and Maximilian Heath; Editing by Steve Orlofsky

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