The Minister of the Economy, Serio Massa, today announced the launch of a Third export increase programme (PIE), better known as the farm dollar, which offers a differential value of $300 for the currency to those who commercialize products of the soybean complex and of the regional economies. In the first case, the deadline for operations is from 8 April to 31 May, in the second until 30 August.
With this provision, the Government aims to increase the reserves of the Central Bank (BCRA) and foreign exchange revenues through exports. However, at least in the case of soybeans, the largest supplier of dollars to national coffers, it remains to be seen how much producers will sell, badly hit by a historic drought that has left them with few or no harvests. To date, the agricultural production estimate for this campaign is only 25 million tons.
“We’ll see how that works out. We understand that there are many producers who have financial needs. The industry will be looking to come out of Monday with the best possible price. It is estimated that they could sell between 8 to 10 million tons of soybeans these 45 days,” he said Gustav Idigora, President of the Exporters Center (CIARA-CEC). This could mean a liquidation of $5,000 million for oilseed complex operations. “We have not reached any prior specific agreement on this,” she clarified.
The activity of the soybean processing industry is at a very low level which is why the measure is good for them. “We are in a depressing situation, with a 70% of idle capacity with many problems to be able to continue to operate, so if the manufacturers sell we will be able to improve our industrial capacity at least in the next 60-90 days“Idigora said.
However, the farm dollar won’t be for everyone. THE production of milk and cheese, wheat flour, corn, sectors with a high impact on the internal market, are excluded. Yes, the production of barley, sorghum and sunflower complex would be included in the programme.
The field gave him the thumbs down
The measure was strongly contested by agricultural union bodies. “The exchange rate of an economy must be unique and free. We don’t need transitional averages that include some and not all. Thus, to the ferocious impact of inclement weather is added the suffering of another drought; THE government running out of ideas“, said the Liaison Table made up of the Argentine Rural Confederations (CRA), Coninagro, the Agricultural Federation (FAA) and the Argentine Rural Society (SRA). For entities, the agricultural dollar is “a new patch on the economy” with a “target mere collection“that generates”significant distortions” Intra-chain. In the previous two editions of the PIE “the costs of futures markets, leases, feed, poultry and pig feed have been hit, as well as the costs of the dairy chain, with closures of dairy farms, among other affected regional economies,” they detailed.
And they highlighted the damage caused by the exchange rate gap to regional economies for more than three years, “with costs that adjust to inflation and/or alternative exchange rates, with which the the survival of many producers is at total risk“.
“The healthy thing for our economy is to have a unified and lasting exchange rate over time to restore the competitiveness of the sector,” he said Nicholas Pinepresident of Ms. E argued that “The negative effects of this policy were already seen last year: few selling at a differential exchange rate and many buying at a higher price”.
“It is more or less the same thing, a partial measure that can only benefit some but harms many others”, expressed Elbio LauciricaPresident of Coninagro.
“AND another episode in a wicked horror saga”, they fired from the FAA. “It’s a complete and utter mistake. an unforgivable mistake”, they opined.
“Surely there are friends of power who win with this provision, and the state itself can lighten itself with a few dollars, but all of this is at our expense why not only we have no dollars or production sell and make a profit, but this measure allows us to distorts the whole scenario in which those of us who produce survive” the FAA explained.
From the connecting table, they were forceful: “The lack of predictability and improvisation are common currency, e producers and consumers are paying dearly for these mistakes“.
Source: Clarin
