By Hugh Bronstein , Reuters
BUENOS AIRES–Farmers in Argentina’s main agricultural province will call a strike this week against a proposed tax increase, but the planned five-day halt in crop sales should have little impact on exports. Growers in Buenos Aires province — which produces most of Argentina’s corn, soy and wheat — say a land tax hike proposal expected to be approved on Wednesday by local lawmakers will hurt already precarious profits and drive some out of business. The country is the world’s No. 3 soybean exporter, its No. 2 corn supplier and biggest source of soymeal used to feed cattle in China’s booming beef industry. It is also the No. 1 exporter of soyoil, used for cooking and making biofuels. The Wednesday-through-Sunday suspension in local grains sales will be too short to have a noticeable impact on international shipments, analysts say, even though Argentina is in the middle of its key soy and corn harvests. But growers may extend the strike if lawmakers go ahead with the tax plan, raising the threat of protests that could slow global supply. Growers in Entre Rios, Argentina’s fourth biggest soy producing province, will also suspend sales in the second half of next week to protest a similar tax proposal there, according to the local chapter of the FAA farm federation. Buenos Aires growers halted grains sales Wednesday through Sunday last week over the tax hike bill. That did not stop the provincial Senate from approving the bill and sending it to the lower house for a vote this week. Nor did it slow soy exports as traders dipped into their reserve stocks. Export companies with operations in Argentina — such as Cargill, Bunge and Noble — will watch to see if this week’s commercial strikes continue past Sunday or spread to other farm provinces such as Cordoba and Santa Fe.
High world soy prices have helped jack up land values in Argentina. But farmers, still hurting from a drought that parched key Pampas growing areas in December and January, say the tax increase would force some of them to sell their fields. “They want to revalue the land by up to 400 percent and base real estate tax rates on the new valuations,” said Fabian Martin, who operates a small farm in the town of Carlos Casares, Buenos Aires province. “It would smash us.”