The sowing of wheat, the most important winter crop, is approaching, and from the field they ask Javier Milei for a gesture: eliminate withholding taxes on cereals, which today are taxed at 12%, in a context of numbers fined for producers.
“A large part of production, and especially regional economies, are going through a critical situation. Given this situation, it is important to take urgent fiscal measures and, for example, as a signal and stimulus for the next harvest, announce now a reduction in import duties export, which would favor and provide predictability that encourages production and consequently the country’s economy”, the ruralists who make up the liaison table said in a note.
“The high tax pressure, which absorbs 65% of income in general and even more in some productions, means a significant increase in production costs, not only due to increases in fuel (which have 47% taxes) , logistics, and now we move on to the national tax, applied to inputs in dollars,” they added.
Specifically, the price of wheat has recently fallen and input values have increased. “The margins do not show encouraging results“, he summarized Catalina Ferrarimarket analyst at Planifica+.
According to the reference,Cereal prices are one step below the average of the last 5 yearss, with the average of the January position for the month of April equal to 210 dollars against the 240 dollars quoted on the same date in the previous cycle. Today the price of December 24th (reference for the moment) is trading around 190 dollars.
“Lagging dollar, expensive inputs and low prices,” the economist summed up Davide Miazzowhich also joined the request to the Government to reduce withholding taxes on wheat.
According to calculations by the economist owner of the consultancy firm Data Miazzo, 32.1 kilos of wheat would have been needed to purchase a liter of glyphosate in March. This is 12% more than the previous cycle.
To purchase one kilo of urea, the producer needs 3.3 kilos of grain, which is an increase of 59% compared to the previous year.
In turn, to pay for a 300 kilometer transport, the farmer needed 145.9 kilos of grain, 10% more than last year. And to buy a liter of diesel, 5.3 kilos, with an increase of 35% compared to the previous campaign.
“The international price of wheat fell by 29%,” Miazzo explained, explaining the main reason for the deterioration of the input/output ratio. In this regard, you underlined that there are two variables that directly affect the value of the inputs: the national tax (17.5%) and the exchange rate. “There are still trade debts that have not been paid since last year and payments for the latest imports continue to be postponed,” she indicated.
Wheat production in the 20223/2024 campaign exceeded 15 million tonnes, with an increase of 23.8% compared to the previous cycle, whose production had been hit hard by drought. But, compared to the results of the last 5 cycles, this harvest recorded a reduction of 15.6%.
In this context, the Agricultural Foundation for the Development of Argentina (FADA) has measured that 65% of producers’ income remains in the hands of the State at its different levels: 94% national, 5% provincial and the rest municipal. Compared to the last report, in December, the index rose by 6 points. The main reasons are rising costs and falling prices.
Go to every harvest. The state’s stake in wheat is 83.9%, higher than soybeans and other crops.
“The greatest drop in prices occurs in wheat, which in turn indicated the highest state participation in revenues in March 2024. In this context and faced with the next good season, the numbers begin to adjust, considering that this drop in prices prices is accompanied by increases in inputs and services,” FADA warned.
Source: Clarin
