Wheat is the most crucial winter crop, and as it approaches sowing season, producers are urging Javier Milei to remove withholdings on grains. The current 12% taxation is a significant burden for these producers, who are already facing difficult economic conditions. The agriculture industry is struggling due to high taxes, rising input costs, and falling wheat prices. Margins are not favorable for producers, making it challenging to cover costs.
Economists Catalina Ferrari and David Miazzo have joined the call for the government to lower wheat withholdings to ease financial strain on producers. However, despite wheat production exceeding 15 million tons in the 2023/2024 campaign, a 23.8% increase from the previous cycle, producers still face financial difficulties.
The deteriorating input/output ratio is largely due to international wheat prices falling by 29%. This has been compounded by high taxes and delayed payments. To make matters worse, FADA has highlighted the need for policy changes to support producers and ensure the sustainability of the agriculture sector.
In conclusion, urgent fiscal measures are needed to support the agriculture sector in Argentina. Reducing export duties can provide predictability for the country’s economy while easing financial strain on producers. Lowering wheat withholdings would also help alleviate some of the burdens faced by these struggling farmers.
Furthermore, it’s important to note that excessive government involvement in agriculture can exacerbate financial difficulties faced by producers. It’s crucial that policy changes are made to support these farmers without further burdening them or discouraging innovation within the sector.
Overall, addressing these challenges through policy changes can help ensure that agriculture remains a sustainable and viable industry in Argentina for years to come.
