MercoPress. South Atlantic News Agency

The IMF understanding does not solve Argentina's problems, “it's only a breathing space”

The “Soy King” pointed out that ”IMF agreed to kick the problem down the road to see if in Argentina we finally decide to make certain transformations

Gustavo Grobocopatel, one of Argentina's most successful farming businesspeople said that the understanding reached with the IMF does not solve the country's problems, IMF merely agreed “to kick the can down the road” and give Argentina time to change its production matrix.

During an interview with a Buenos Aires television channel, the “Soy King”, pointed out that “IMF agreed to kick the problem down the road to see if in Argentina we finally decide to make certain transformations, creating a lasting productive and sustainable structure; we have the resources, we have the people”.

The understanding with the IMF does not solve the problem in the short term, but “gives us breathing space to begin discussing how to solve the problem”.

Regarding the soaring international prices of soybeans and corn, Grobocopatel forecasted that even at those levels, Argentina and Argentine farmers will not benefit as they should, since “Argentina has been stagnant in agriculture production for seven, eight years”

“If we had followed on Brazil's steps we could be exporting an additional 10 billion dollars, creating more jobs, and contributing to overcome the very difficult situation Argentina is facing”, the Soy King argued, indicating that with higher international prices the most Argentine farmers can count on is compensating for the losses from the lack of rains and drought.

The stagnation of farm production is the result of repeated policies which do not solve the basic problem, explained Grobocopatel, and pointing to export taxes Argentine farmers experience said, “yes, they were a solution in the short term, but now we are paying the consequences of insisting with those unfounded levies, which only help to discourage farmers”.

“I think we need urgently to change export taxes for some other fiscal resource, because they are responsible for not having the production we should be having,” argued Grobocopatel,

“Why aren't we exporting natural gas or an extra 10 billion dollars? It's because all of these mistakes we have made, and export taxes is one of them”.

A solution would be for the business sector to pay more taxes, but at the same time “incentivizing investments, creating more jobs, and changing the export taxes for some kind of tax on land to promote investment and real business risks, but also rewarding success”.

“The heart of the matter is how to pay taxes in a virtuous way to that they generate investment and jobs. That I believe is the essence, not how much to pay but how to make them really resourceful”, concluded Grobocopatel.