MercoPress. South Atlantic News Agency

“Meaningless” tax changes rejected by Argentine farmers

The Argentine government unilaterally modified on Thursday the controversial soy and grain export tax system, which has sparked a serious almost 80 days conflict with farmers and a serious political crisis.

However farmers that have taken back to road blocks and protesting have rejected the announcement said camp leaders arguing changes are "meaningless". According to the new system more small soy producers would be eligible for export tax reimbursements while the tax rate when soy prices rise above 600 US dollars a ton, --a level far above current prices-- will be lowered. But the modifications did not address the central demand of angry farmers, who want the new sliding system on grain and soy exports repealed. Even with the change, soy exports will still be taxed at a higher rate than before the new tax was enacted in March. "In principle, this does not resolve the situation. Farmers will pay exactly what they were paying when the tax was enacted March 11" said Ricardo Buryaile, vice president of the Argentine Rural Confederations. "These are unilateral announcements. Once again we haven't been consulted and according to what was said, the Kirchner administration officials don't know what they are talking about", said Luciano Miguens president of the Argentine Rural Society. "They claim we didn't want to sit and discuss which is not true. We've always said and given evidence that we want to sit, discuss and arrive to conclusions. What was announced changes nothing, absolutely nothing", he added. "Changes are meaningless since with soy prices at around 470 US dollars a ton, the tax rate is 40%". Argentine farmers are now on their 79th day of conflict and on their third major protest holding back grains and oilseeds from market. This third protest was launched on Wednesday and is expected to last through Monday. Cabinet Chief Alberto Fernandez, surrounded by several provincial governors with strong agriculture sectors, announced the modifications in a news conference, but defended the central notion of the soy exports tax, saying too much of Argentina's farmland had been given over to soy, at the expense of crops that would feed Argentines. "I'm confident this resolves the concerns of a lot of farmers," said the Cabinet chief. Argentina began taxing agricultural exports in 2002, during a deep economic crisis, and has steadily raised rates since. In March, the new sliding scale exports tax set a virtual price cap on soy with a 95% levy on revenue exceeding 600 US dollars a ton. The government removed that cap on Thursday, saying that doing so would end potential distortions on futures markets. The new maximum tax rate is 52.7% at 750 US dollars per ton.