In an official communication to the National Securities Commission, the agricultural input companies, Grobo and Agrofina, confirmed that they could not comply with the payment of a stock market promissory note for US$100,000. They also anticipated complications to honor commitments for US$10 million until March. Days before, Surcos, another firm in the sector, informed the CNV of an embargo for more than US$7.5 million.
Analysts of the agricultural sector speak of a set of problems that range from lower demand for inputs to poor financial management of those companies in particular. In any case, there is agreement that all the factors add up to an equation that deteriorated for the entire value chain of the sector.
An agricultural businessman who participates in the decision-making circle of the Argentine Rural Society told Ámbito that “income is being impacted by the drop in the exchange rate, while dollarized costs are rising”. And he continued with the description: “falling income and rising costs, resulting in a sharp reduction in margins.”
The claim of the countryside and “the goose that lays the golden eggs”
The representative of the field who asked to remain anonymous acknowledged that they are not the only sector that is complicated but said that they are “the only ones punished for years with confiscatory and distorting taxes that attack property and production” and warned: “The patience of the sector is at its limit, it is not smart to kill the goose that lays the golden eggs.”
Added to the combo of exchange rate appreciation and low international prices is the tax pressure that continues to be high. In the Rural Society they say that it is between 60% and 70%. The president of Coninagro, Lucas Magnano, said that it is a “very bad tax” and that “if there are no improvements in tax matters, producers will begin to be at risk.”
The former president of the same entity and agricultural producer Elvio Laucirica agreed that the situation is “critical, very worrying”. In that sense, he said that for the next soybean campaign a reduction in withholdings is needed because if not “the numbers are going to be very bad.”
The rental problem
For producer Gustavo Miroglio, the situation is even worse for producers who rent. It is estimated that 70% of grain production is carried out on leased fields. In dialogue with this medium, he said that those who are in this situation are “suffocated” and warned about the adverse weather conditions in the north of the Province of Buenos Aires.
Despite these conditions, the Argentine Agroindustrial Council estimated that in the next campaign there will be a growth in production and exports. However, foreign exchange income will be affected by the sharp drop in prices and it is expected that US$710 million less will enter the country in 2025.
There are several sectoral complaints: there has been a request for a long time to modify the conditions of access to credit to access subsidized rates, and there has also been a request for more and better infrastructure. But the pressure will come because of the urgency: the entities will redouble the questioning of withholdings and exchange rate policy: “With this dollar, nothing can be produced,” summarized a senior manager from a relevant firm.
Source: Ambito
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