It is time to bridge the gap between fiscal needs and production

While the “soy experiment” gives us no respite, on Monday we had a big surprise with the September production report issued by the USDA (United States Department of Agriculture). It turns out he lowered the forecasts by yields of soybeans 3% compared to the previous forecast, and none other than a 8% less than in 2021. Also reduced the area to be harvested by half a million hectares.

Consequence: prices have skyrocketed. They increased by 5%, more than $ 25 per ton. Good news for those who haven’t sold yet, who now have an added incentive. And as always happens they dragged the grainwith which there are communicating vessels because (as in these pampas) both crops compete for land use.

This triggers several comments. The decision to raise the soybean dollar from 140 to 200 dollars for the month of September meant, on paper, an improvement of almost 40% in the price of the goods. This produced a flurry of supplies, which was what the Minister of Economy, Serge Massa, I was looking for. His goal was to present himself before the authorities of the international financial organizations, showing some results in his first steps as an area manager.

Beyond the side effectsthat exist and have aroused reactions from all sectors affected by the provision, the concrete thing is that (in this poker) Massa was able to show some “Solvency” of the state. He got funds from the IDB, without the usual counterpart of a specific destination. And just yesterday he made substantial progress with the International Monetary Fund. We have already said: “It’s soy, stupid.”

But it’s not just soy. And he agro-industrial complex, which includes all the competitive supply chains: corn, wheat, sunflowers, peanuts, rice, sugar cane, wine, fruit (pome fruit, stone, berries), olive oil, vegetables. All of course wanting an end to the division of trade and export duties.

The first corollary of the soy experiment is that when there is a price, the commodity appears. But in this case he operated on the shares. It was what Massa was looking for. Perhaps he should be convinced that, in addition to looking for devices for manufacturers to liquidate their stocks, it could set different rules of the game to generate a growing flow of exportable products. It never hurts to knock on this issue. There are mechanisms that allow this stimulate production without implying fiscal sacrifices.

we already know the incidence of withholdings on the price of basic foods is marginal. They have some impact on production costs of transformation productsas clearly seen with the implementation of the 200 pesos dollar in the soybean meal they use dairies, feed, poultry farmers, egg producersetc.

The way to avoid the tax sacrifice is to turn it into export duties income payment. You can also consider some mechanism that allows you to obtain resources from the sector without implying a levy, such as withholdings today. It is very difficult for Massa, with a fixed term of office (15 months), to try something more creative than to operate on a daily basis. But it is essential to deepen this debate for the times to come.

Experience indicates that almost all politicians with a chance to rise to power (and their economists) consider export duties to be inevitable. And it is not enough for them to proclaim that “they are a very bad tax”, as Mauricio Macri tired of repeating before and during his administration. It is necessary to discuss alternatives and models that harmonize fiscal needs with the aim of expanding production (all growth goes to exports).

The interesting thing is that, just when the American harvest arrives, which always marks a drop in prices, the rises that surprised us yesterday occur. The train is passing. matter of moving forward.