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Argentina - No help in global wheat crisis
20.08.2010 10:34 "Agro Perspectiva" (Kyiv) —
British newspaper «The Financial Times» has run a story focusing on Argentina’s wheat production, explaining that due to export limits and taxes, «farmers have slashed the land sown with wheat to a 111-year low» and cereal exports «have been halved over the past five years.»
«It hardly matters to Argentina how high international wheat prices go in the wake of Russia’s export ban: its producers are unlikely to be able to cash in,» the article begins, adding that in the past four years, «Argentine farmers have been grappling with wheat export limits, which the government says are to protect domestic prices, and also pay 23 per cent in export taxes, further discouraging overseas sales.»
The piece explains that it is due to those limitations that farmers have slashed the land sown with wheat to a 111-year low.
The FT the
n explains that «wheat farmers in Argentina have turned to other crops, such as soybean, while some international investors, who are critical to the flow of money into capital-intensive agriculture, have left the country and turned to Uruguay, Paraguay and Brazil.»
The article then says that «the irony is that the price of bread in Argentina — which the government’s measures are supposed to protect — has leapt in recent years amid rising inflation, with the cost of
wheat accounting for only a fraction of the bread price.»
The piece concludes by saying that «uncertainty about the export cap is compounded by doubts about export taxes,» and adds that the government’s measures for charging such tariffs «are set to expire this
month, and it remains unclear how the system might be amended.»
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