The President of the Nation, Alberto Fernández, in general agreement of the ministers, today ordered the Derivation of 1.3% export duties collected from sales of soybean by-products, flour and oil, to Argentina’s Wheat Stabilization Fund (FETA), a fund created in March 2022 by the former Secretary of Internal Commerce, Roberto Feletti, to subsidize wholesale flour producers and contain the increase in the price of common bread after the increase in cereals that occurred following the war between Russia and Ukraine, responsible for 28% of world cereal production.
FETA was harshly opposed and questioned by most of the millers who decided not to be part of a system which, due to the conditions required, would have led them to sell flour below cost, and would have distorted the market. Of the 151 (mostly small) flour companies that joined, only a handful, being the Navilli Group’s Molino Cañuelas, a bankrupt company that represents 25% of the market, suspiciously benefited from the granting of 80% of the fund’s collection in 2022 which amounted to approximately $400 million, something that merited two criminal complaints and requests for an investigation.
Initially, this fund was funded by a two-point increase in withholding taxes for soybean meal and soybean oil from 31% to 33%, an increase that was terminated on December 1st. This Thursday, through Decree 288 signed by all the ministers of his cabinet, Fernández established that from now until December 31, 2023, 1.3% of soybean withholdings will go to subsidize wholesale milling industrialists, authorizing the Ministry of the Economy to set the percentage points of the rate of the export right of the aforementioned goods to be allocated to FETA. In this way it aspires to contain the price of flour and, consequently, that of ordinary bread, an objective far from being achieved in the first year of the trust’s activity when its price shot up by more than 100% on the counters. .
However, among the arguments to order the diversion of 1.3% of export duties on the soybean complex, the national government argues “that since FETA has been an adequate tool during 2022 to mitigate the impact of the detailed situation in the internal market (less wheat production) and comply with the purposes set out in Legislative Decree 132/22, it is necessary to urgently issue this provision in order to determine the resources that the aforementioned Fund will have to dispose of in the year 2023, a requirement without which said tool cannot function”. And he clarifies that, by virtue of the above, “it becomes impossible to follow the ordinary procedures for the sanction of the laws” for which the provision is established by decree.
Source: Clarin
