Argentina farm group plans protest against FX controls, taxes

By Walter Bianchi

BUENOS AIRES, Feb 24 (Reuters) – Argentina farmers, currently being hit hard by a prolonged drought, will hold a protest next week to demand better taxation, foreign exchange rates and financial support conditions, a major growers federation said on Friday.

The Argentine Agrarian Federation (FAA) said producers on Tuesday will gather at a major junction of a key highway going from farm hub city Rosario in Santa Fe to capital Buenos Aires.

“We will demonstrate and we will continue making our demands,” the FAA said, adding it would focus on asking for export taxes to be eliminated, financial aid to properly reach farmers and improvements in Argentina’s skewed FX markets.

Argentina’s strict capital controls have stoked popular gray currency markets where dollars are twice as expensive as the official rate, a disincentive for farmers to export because dollar revenues have to be converted back at the lower official rate.

The government has at times rolled out a preferential “soy dollar” exchange rate to encourage exports, hoping to bring in much-needed foreign currency from its top cash crop.

The country is the world’s top exporter of processed soy oil and meal, and the No. 3 for corn. However, a long droughtworsened by climate change has led grains exchanges to slash harvest forecasts, with the 2022/23 soy crop expected to be at the lowest level in around 14 years.

“For two or three years punishment by various inclement weather conditions has built up, such as droughts, floods, frosts and hail, which have deepened this crisis, leading to some farmers ceasing to exist,” the FAA said.

The Buenos Aires grain exchange on Thursday cut its estimates for the 2022/23 soybean and corn harvests to 33.5 million tonnes and 41 million tonnes respectively, due to the impact of a drought, high temperatures and recent early frosts.

(Reporting by Walter Bianchi; Editing by Josie Kao)

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