In the week of the Rural Society farm show in Palermo, the government blew hot and cold with the farming sector, blasting grain hoarding to the tune of US$20 billion over the weekend but offering a reloaded dollar to those selling their harvest by Tuesday.
Yet neither the carrots nor the sticks seemed to impress farmers who announced ahead of the Central Bank’s Tuesday offer that they would not settle for anything less than a unified currency market since creating yet another differential exchange rate for agricultural exports would only benefit “speculators” (a word also at the forefront of government critiques).
The carrot approach – favoured by then Ministers Silvina Batakis (Economy) and Daniel Scioli (Production), both now removed from those portfolios as well as Lower House Speaker and brand-new super-minister Sergio Massa, among others – took the form of offering farmers the same exchange rate as that required for ordinary dollar purchases up to US$200 (namely the official exchange rate plus a 30 percent tax and a 35 percent surcharge to be reimbursed from income tax) for 30 percent of their grain sales while the remainder would be deposited in a bank and pegged according to devaluation. The offer will stand until the end of August.
Central Bank Governor Miguel Pesce said that this decision would offer farmers the same benefits as other productive sectors. Pesce estimated soy retention at US$2.8 billion in the hands of farmers and US$2.2 billion in related industries.
Yet farmers were quick to reject the initiative, saying that it was insufficient to bridge a fourfold gap between the “blue” parallel dollar and the official exchange rate for farmers once export duties have been deducted, estimating the improvement at 15 percent at best.
The Agriculture Ministry estimates that up to 22 million tons of soy have yet to go to market while market analysts placed soy sales at their lowest level since 2005, almost 20 percent below last year’s levels.
On Tuesday President Alberto Fernández in Chapadmalal accused the farming sector of “speculating with devaluation ahead of selling” and holding back US$20 billion worth of soy but only hours later came the offer of the exchange rate booster.
Indeed, as the economy has gone south, so has the situation of social unrest. It’s not only the President that is accusing the agricultural sector of speculating, but also the social organisations led by picket leaders like Juan Grabois who claim the government is only looking to calm markets, not the poor. They’ve been on active mobilisation over the past several weeks, including this week on their quest to get the Fernández-Fernández administration to pass a “universal living wage” as inflation and devaluation ravage Argentines’ purchasing power.