Monday, July 22, 2024

ARGENTINA | 21-07-2023 18:07

New 'agro dollar' exchange rate for agricultural exports criticised by producers, opposition

Head of the Rural Society and Buenos Aires City mayor join forces to seek structural measures for the farming sector.

Over the last few hours the possibility of a new, beneficial exchange rate for agricultural exports dubbed "agro dollar" being implemented has begun to take hold, , although the initiative has not made the best of impressions in the rural sector itself.

In fact, the President of the Argentine Rural Society, Nicolás Pino, called it “a new patch”, while showing his annoyance at this kind of policy “benefitting some and harming others”.

“This type of measures expose the macroeconomic imbalances of this country”, assured Pino in Palermo, while the new edition of the traditional exposition displaying the finest genetics in the country was taking place.

Specifically, he said: “If there’s a new differential dollar, we’ll continue to have patches benefitting some and harming others. The measures have to be general and benefit the entire sector”.

In the meantime, Argentine Rural Confederations and Coninagro declined to make any comments until there was more information or official announcements about it.


What we know about the new agro dollar

A new differential exchange rate for the farming sector has become a real possibility, included in another package of measures, resulting from the negotiations conducted by the economic team headed by Sergio Massa with the International Monetary Fund, with a view to getting approval of the fifth revision of the agreement.

In the case of the agro dollar, it would affect regional economies, sunflower and sorghum, in order to obtain around USD 2 billion. The exchange rate for these exports is speculated to be around $350.

This measure is to be announced by Minister Massa at the Rural Exposition on Monday, July 24, during the visit of presidential hopefuls for the PASO primaries on August 13.


Rodríguez Larreta’s outlook on the farming sector and his plans if he becomes president

City of Buenos Aires Mayor Horacio Rodríguez Larreta, in turn, also claimed structural measures for the sector enabling producers to plan ahead. The presidential hopeful for Juntos por el Cambio, took part in the official opening of the Palermo exposition and among other things showed his strong disapproval for the measures carried out by the current administration.

“In a country whose development drive will be exports, we have to finish with quantitative quotas. We have to seek to open markets. Argentina has business agreements with countries that only account for 10% of the world population”, he described.

Among other things, he also focused on the farming sector’s Achilles’ heel, export duties: “We have to be aware that duties are a terrible tax. No country has them”, stated Rodríguez Larreta. He further assured: “We are committed, as of 10 December, first to remove all export duties from regional products: rice, milk, beans, peanuts, lemons, olives, throughout the country. It’s a very federal measure. And to start on a path of reduction, serious yet sustainable, over time, of export duties for larger products”, he said.

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