Argentina will not hike taxes on grain exports, tensions with growers defused

Argentina's government agreed to not hike taxes on farm exports or limit how much grain can be shipped abroad to curb rising food prices, a group representing farmers said on Wednesday. Argentine farmers had earlier warned they would protest if the government implemented a plan to hike export taxes or impose export quotas to hold down inflation.

"Today it is important to convey to our producers that there will be no increase in export taxes and no intervention," said Jorge Chemes, president of Confederaciones Rurales Argentinas (CRA), after leaving a meeting with Argentine President Alberto Fernandez. Agriculture Minister Luis Basterra said the president had no intention of applying new taxes and met with the farmers to reach an agreement, local daily newspaper Clarin reported.

The government did not immediately respond to a request from Reuters for comment. There is currently a tax of 33% on soybean exports from Argentina and 31% on soyoil and soymeal. In the case of corn and wheat, the tax on their sales abroad is 12%. The taxes are paid by export companies, which pass the cost down to farmers.

Government officials have said those levies might be increased as the country struggles with consumer price inflation that hit 36% last year, and 4% in December alone. In recent days, Fernandez outraged farmers by accusing growers of being one of the main drivers of inflation.

Chemes, the farm chamber leader, said producers in the meeting explained to the government that the problem lies between field and retailers, and not with the farmers themselves. "It was perfectly understood that our participation in the final price is low," Chemes said.

Chemes said farmers would meet more regularly to discuss the root cause of rising food prices. Argentina is the world's top exporter of soyoil and soymeal livestock feed. It is the No. 3 exporter of corn and is also among the leading international suppliers of wheat.

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