President Javier Milei has declared a reduction in agricultural export duties for the majority of products, a move that comes less than a month after his administration raised these duties. Milei announced his plans during a speech on Saturday at the Rural Expo, an annual event showcasing Argentina’s farming sector. “This seeks to boost farming, the economy’s most productive sector, which has been severely punished by these taxes over the last 20 years,” stated the president. He stated that the reductions were “permanent” and assured that they would not return during his tenure in office.
The powerful farming sector in the country has been advocating for the permanent elimination of export duties for decades. Governments have employed these measures not only to generate revenue but also to regulate local food prices. Negotiation tactics have also seen the implementation of lower export duties, which encourage exporters to liquidate their U.S. dollar sales, thereby contributing to the country’s international reserves.
Milei’s administration made the decision to cut export duties for certain agricultural commodities in January. The break, which was originally set to continue until June and subsequently extended to July, encompassed soybeans, corn, sunflowers, sorghum, and all associated byproducts. Last month, the administration reinstated higher export duties for an array of products, which has drawn criticisms from farming associations. Beef sales abroad, previously subject to a 6.75% export duty, will now incur a reduced charge of 5%. Corn is projected to decline from 12% to 9.5%, alongside sorghum, which will also drop from 12% to 9.5%. Sunflower is expected to fall from 7% to 4%, while soybeans will decrease from 33% to 26%. Additionally, soybean by-products are anticipated to reduce from 31% to 24.5%.
The previous administration permanently eliminated export duties on a wide range of agricultural goods, referred to in Argentina as regional products. The list comprised sugar, cotton, wine, tobacco, forestry products, and rice, among others. In a recent announcement, the administration confirmed that export duties on wheat and barley will be maintained at 9.5% until March 31, 2026. The government is grappling with a crisis of international reserve scarcity, a situation exacerbated by a temporary reduction in export taxes. In response, the agroindustry has been liquidating approximately US$200 million daily during the first half of the year. Nonetheless, the agroindustrial sector anticipates a significant decline in dollar inflows.
Milei stated that the tax reduction for the sector is “only possible thanks to the fiscal surplus.” He confirmed, to thunderous applause, that his administration would veto laws recently passed by Congress increasing retirement pensions and the budget for disabled people, arguing that they would “lead the country into bankruptcy and poverty.” “Did you think the chainsaw was a joke?” he inquired.
Milei’s announcement came after Nicolás Pino, the head of Argentina’s Rural Society, which represents a segment of the nation’s farmers, made a plea for the total elimination of export duties. “We know what to do, and we like our work.” “We only ask that we be allowed to do it without any adversities other than those posed by nature,” Pino said, adding that since 2022, export duties contributed “more than US$200 billion to the state coffers.” “Where is that money today?” “What did the governments do with it?” he asked. He criticized the tax, describing it as a “scourge on the common good, damaging Argentina as a whole and seriously hindering its development.”