The combo generated during the summer by the high temperatures, the lack of rain and, as a finishing touch, a frost on February 18 was decisive for the economic collapse of many agricultural producers.
Despite having different dimensions, the negative results are transversal to the entire production model: it hit both owners and tenants, although in the latter case with a greater incidence.
“For many producers who rent fields, it will take three to four campaigns to recover from the loss generated in the current season,” warned Juan Manuel Garzón, chief economist at Ieral.
When the expectation at the beginning of the campaign, in a normal scenario, was to obtain a margin of US$ 150, with a mix of equal parts between soybeans and corn, the loss in some cases reached US$ 700, warned the economist.
In a new chapter of the Situation and Perspectives cycle organized by the Fundación Mediterránea institute, the impact of the climate on the current and future economy was the focus of the lectures by the Cordovan economist and his colleague from Mendoza, Gustavo Reyes.
While the producers in this campaign will lose money or, in the best of cases, they will earn much less than in the past, there is a partner that always charges, whatever the economic result: the State.
At the start of each productive cycle, the greatest risk that the agricultural company has is the weather, although the national government in recent years has made an effort and does everything possible to imitate it, compared Garzón.
In a scenario of normal productive yields, which is not the case of the current campaign, in an establishment in the department of Colón that has a company in equal parts of soybeans and corn in its own field, the State keeps the largest share.
“He pays US$ 677 per hectare in taxes and the net margin for the producer is a little over US$ 400,” he stated. It is a tax pressure close to 60%.
Within the contribution made by agriculture, export duties are the ones with the highest incidence: U$S 448 per hectare, more than what the producer receives.
In drought conditions, as in the current campaign, the role of the State in revenue matters is exacerbated.
If the establishment in the north of Cordoba, used as a simulation model, lost 50% of the harvest, the State continues to charge on what is produced. “He is left with US$ 266, and the producer’s margin is negative,” compared the Ieral economist.
Unlike what happens in well-designed tax systems, in which the tax burden is reduced in the face of a reduction in the taxpayer’s margins, in Argentina this format is far removed.
“Due to the nature of withholdings, it does not adapt to the condition of the person who pays them,” Garzón admitted.
Under these conditions, the treasury will continue to collect even though producers will lose around 50 million tons of grain nationwide.
The Mediterranean Foundation estimates that the transfer in concept of withholding rights will be around US$ 4 billion, less than half of last year, when the tax left US$ 9 billion in the treasury’s coffers.
The humidity conditions and the financial back will be decisive for the producer to seek revenge with the sowing of wheat. If not, he will try to retaliate with the next soybean and corn campaign.
“The world is improving, although Argentina is not yet. The key for next year is to carry out an anti-inflation plan, but only God knows. Optimism is a matter of belief”, observed the economist Gustavo Reyes.
The future government could trust that next year there will be a greater supply of dollars, because first there would be more grain harvest.
For this tailwind to be harnessed, a new economic regime should be put in place. With a State that does not generate so much risk.