FAS: Argentina makes Ag subcabinet agency, imposes taxes | TSLN.com

FAS: Argentina makes Ag subcabinet agency, imposes taxes

In a dramatic development for a country in which in which agriculture has always been the most important industry, the Argentine government announced a plan to bring the Ministry of Agroindustry under the Ministry of Production, the Agriculture Department's Foreign Agricultural Service said in a report released Thursday.

The plan is part of Argentina's move to cut the number of ministries in half, and would make the agriculture ministry a sub-secretariat, FAS said.

"Furthermore, the government will begin imposing variable export taxes on all products and suspend the gradual reduction of the export tax for soybeans amidst a difficult fiscal situation," FAS added.

Argentina's agriculture minister is Luis Miguel Etchevehere, a farmer from Entre Ríos province in the vast Pampas grains belt and former head of the Argentine Rural Society, the country's most prominent agriculture organization.

Argentine farm leaders have been big supporters of President Mauricio Macri. Producer groups said that the new taxes "are a 'terrible mistake' and that the farm sector already bears an inordinately heavy cost in supporting the national economy, adding that such a move discriminates against a sector that brings in U.S. dollars, and furthermore that this policy has not worked in the past," FAS said.

Argentina's economy "cratered" in the second quarter, partly because a severe drought reduced agricultural exports, Markets Insider reported.

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The country's gross domestic product contracted 4.2 percent in the second quarter of 2018 from the same period last year and 3.9 percent from the prior quarter, government statistics agency Indec said on Wednesday, Reuters reported.

–The Hagstrom Report