(Photo: Macri’s speech was focused in the electoral agenda)
Buenos Aires, March 4th. Last Friday March 1st, President Macri addressed to the National Congress in occasion of the opening of ordinary sessions. It was the last address to the Congress because his mandate concludes next December. But if the economic sector (including farming) was waiting for announces or a proposed legislative agenda for this year, surely it was a bit disappointed.
President Macri’s speech was focused in a confrontative agenda with his probably most threatening rival: former President, Cristina Fernández de Kirchner. Along his address he remarked political issues like the corruption trials that involves former Kircheristas’ officials, but he avoided to talk about the present economic situation
Someone in the farming sector were expecting for references to measures of high impact in this key activity in Argentina. For example, they expected some mention to the lifting of export taxes, or a new plant breeders’ rights law, or a law that promotes the use of fertilizers. But nothing of this occurred.
The only mentions of President Macri about the food and farming sector were related to exports, for example garlic, beef, lemons (to the US), cherries and blueberries (to China), soybean oil (to India), etc, and related to the severe drought that cut the grain production in the 2017/18 season.
The Government is waiting for record grains harvest around 140 million metric tons, which enters fresh dollars to a weak economy in an electoral year. To maintain the dollar quiet is vital to increase the chances of being elected again in the October election.
But the farming and agribusiness sector have a urgent agenda. To reduce or eliminate export taxes is one of them. Soybean crushers recently asked President Macri to reimpose the export tax differential between soybean and its byproducts, avoiding that promoting the export of the raw material will damage the industry and the farmers, and, also, the fiscal income.
Meanwhile, the popcorn chain is asking for reducing the export taxes, too. The chairman of the popcorn chamber, Sergio Casas, told to the media that Argentina is loosing competitiveness against Brasil, due to the high fiscal pressure, and exports could drop from 200/220,000 tons to 120,000 tons next year.
The dollar value is another key issue for the farming economy. If Government achieve its objetive to stay the dollar quiet (around $40), and domestic prices rise to the inflation rate rythm, export industry could loose competitiveness. This is the case of the beef industry, which could not able to pay more than US$2 per live weight kilogram of steers.
President Macri and its governmental coalition Cambiemos are facing a hard year, where the economy will play a relevant role in the chances to achieve a new mandate.