It is true that the food prices They increased sharply after the end of the pandemic as a result of a resurgence of consumption around the world. These rises deepened with the start of the war between Russia and Ukraine, which could now intensify with the participation of more NATO member countries.
In a war scenario like the one we live in “the granary of the European world”not only price distortions are likely to be generated, but also complications with the logistics and availability of basic raw materials for food production.
Faced with this reality, the agribusiness sector raised on several occasions the possibility of Argentina becoming an important player as a supplier of food markets, which will have unsatisfied needs. There is an opportunity for countries that have surpluses and that could dump them on the international market at prices never seen before.
However, the debate on how to increase production is truncated when the Government only thinks about implementing tools that decouple international prices from local ones, without taking into account that there is a virtuous circle between development, growth and improvement of the economy. that it could not only raise the quality of life of those who today do not have opportunities, but also raise the level of political and economic discussion in a country that has long believed that it is discussing income redistribution when in fact it is discussing poverty.
The war, as sinister as it may be, could give food-producing countries the chance to take several steps forward on the road to economic recovery, a kind of shortcut that, if well managed, would improve the quality of life of millions of Argentines who today they are mired in poverty.
When only “retentions” are discussed, without a productive strategy or without a developmental perspective for the country, a key opportunity for countries like ours is missed.
When egos and personalities are privileged, an opportunity is missed that could put Argentina in a prominent place in global trade.
When the strategy of attacking those who have the most is used to combat poverty, far from being a step forward, it is actually the beginning of a road to failure.
Just as an example, an increase in withholdings on a crop such as wheat would hit the productive fabric, the industries and, although it seems otherwise, also the consumers very hard.
The cereal has a price on the international market of around US$430, which is equivalent to US$50,000 taking the official exchange rate of US$117. When the withholdings are discounted, we arrive at what the producer is paid in the domestic market when he delivers his grains and that number is $44,000, which may be slightly higher due to the bidding that exists between the companies that want to buy for export. At today’s close, the cereal is listed on the domestic market at $44,800 at the Rosario terminals.
To bring wheat to $25,000, withholdings equivalent to 50% would have to be applied, something that would be completely unreasonable. Assuming that a bill is sent that doubles the withholdings, they would go from 12% to 24%, but they would leave a grain of around $38,000, which would lead us to the same result that was obtained with each of the measures implemented by the Government: breaking what works and not solving what is intended. With these levels of withholding and tax pressure, not only will the “balance” price that Feletti seeks not be achieved, but it will also be very difficult to find a producer who wants to sell his wheat. And if someone does, it would only have about a 2% impact on the price of derivatives.
What is worrying about this situation is that in reality, every time one seeks to solve internal market issues, withholdings are thought of, as if it were the supreme tool that solves all ills. The use of export rights has a limit and clearly the Government has reached the point where the pressure is no longer bearable.
The failure of an increase in withholdings is almost guaranteed, not only because it does not solve the economic and inflationary problems, but also because it would exacerbate the political crisis and could put the country on the brink of a new fight with the countryside, although this time the Government would very weakened.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
