The government insists on attacking rural producers, ignoring their property rights and forcing them to liquidate soybeans with a deceptive deal.
LA NACIÓN: The Government, as usual, needed to find a scapegoat in the face of its irresponsibility, the depletion of reserves and the soaring price of the dollar resulting from the inflationary overflow. The populist playbook indicated that whoever was chosen should also be able to be accused of responding corporately to petty interests, absolutely opposed to those of the people. Rural producers have once again been the chosen target. The desire to permanently punish the country’s most productive sector in a thousand and one ways is no longer surprising.
On this occasion, more precisely, it is the soybean producers who are being targeted, turned into the enemies of society by a government that builds on the division and fracture of its discursive axis, when they are, on the contrary, a source of much-needed foreign exchange. The confrontation has a long history. While exercising the presidency, Cristina Kirchner belittled their efforts, even going so far as to stigmatize soybeans, disparagingly baptizing them as “el yuyo”.
Producers are charged with retaining the harvested grain instead of selling. Trying to substantiate such an accusation, the Government has said that the proportion of the harvest sold is lower than the proportion sold in years prior at the same date. Thus, this is supposed to be a speculative action to the detriment of the country at a time when we desperately need the dollars to be liquidated in the Central Bank. The lie did not end there. Deepening their vocation to radicalize the confrontations in times of enormous social sensitivity, they lied by stating that the retained grain is food that is taken away from those who are starving. Far from assuming their responsibilities, they once again charge against the rural producers, relying on the official media insisting on reproducing photographs of fields with collector silobags, naturally large and eye-catching, but which in reality are not quantitatively relevant. The official media has clearly acted to intimidate the producers and conveniently intensify old confrontations, which only serve to encourage the destruction of silobags and incite demonstrations.
Reality denies each and every one of these false accusations. The volumes of soybeans sold to date are not very different from those of previous campaigns. If the comparison is made in currencies, it is concluded that the government of Alberto Fernández, due to prices, was the most benefited in the last 20 years. According to a report distributed by the Fundación Libertad y Progreso, in the first 32 months of this government, 77,087 million dollars of soybeans were liquidated, 25% more than in the same period in the government of Mauricio Macri and 21% more than in the first presidency of Cristina Kirchner. Notwithstanding these figures, if a greater current retention of the product were verified, the Government should have no objection. In the first place, because everyone is free to decide on their property under the protection of the Constitution and because it is the result of thousands of independent decisions involved. There is no conspiracy here either. Secondly, the Government itself created the conditions that promote a reluctance to sell in a hurry in soy growers. They do it as they need the money for equipment, supplies or salaries. It is preferable to retain any surplus in product and not in money, selling only when it is necessary to do so.
Realizing this reality, or perhaps trying to have more arguments to accuse the producers, the Central Bank decided to implement benefits for those who sell the product for export and liquidate the currency before next August 31. They are not granted a higher exchange rate, but they are allowed to apply 30% of the sale to repurchase “solidario” dollars, whose price (official, plus Country Tax, plus withholdings) is 32% lower than that of the dollar in the black market. The other 70% of the sale can be deposited in a bank, at sight, in pesos, adjusted by the official dollar price (linked dollar). The banks will cover themselves by subscribing LEDIV bills issued by the Central Bank with the same type of adjustment. In this way, theoretically, the currency and exchange rate risk would be partially overcome, but the variation in the international price of grain won’t. As the agricultural producers point out, the Government does not solve with this patch the increases that must be paid for the inputs they need and that are not governed by that dollar solidario.
The limited benefit of this resolution for the producer would be the price difference that comes from applying 30% to buy dollar solidario and sell at MEP dollars, financial procedures to which farmers are culturally unaffected: they are producers and not speculators. It would be around 10% of the value of the grain sold. This gain is opposed to the producer’s difficulty in understanding the risk of being supported by the guarantee of a letter from the Central Bank. It is a lower risk since they are issued by whoever has the money machine. But who trusts the Argentine government? People in the countryside that those who enter into this operation may later be persecuted by the AFIP and accused of illegally withholding their harvest.
Julián Domínguez’ resignation as Minister of Agriculture, Livestock and Fisheries is the resignation of an official who recognized the importance of the agricultural sector as an engine of growth and raises new uncertainties as the portfolio is unified with those of Economy and Production under the hand of Super Minister Sergio Massa.
Facts will tell if the measure speeds up liquidations. But, if this is the case, few illusions can be entertained regarding rebuilding reserves with an exchange rate gap that exceeded 150% a few days ago and an overflowing economic situation managed by a disoriented and changing government, which has lost confidence and seems to be clearly incapable of recovering it with proven failed recipes and that insist on recycling, moving further and further away from the support of a tired society.