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News 238 views last update:6 Aug 2012

Argentina government to control grains and beef trade

Argentina is studying the creation of a new federal entity to control the trade of grain and beef - allowing the government to dominate the market.

A spokesperson at the Ministry of Production said that a full monopolization of farm trade wasn’t planned but that something similar would be established. The local daily Pagina 12 outlined the program last weekend.
 
The newspaper quoted officials at the Production Ministry saying the government was considering a plan to remove export taxes on grain and create a new trade agency to buy local crops and manage exports.
 
Doubts about the precise nature of the plan persist, with spokespeople from a variety of different ministries having provided conflicting reports over the past days.
 
According to the Pagina 12 article export ports and storage silos would remain independent. Traders would continue acting in the market “buying raw materials to be processed and later exported with added value.”
 
Similar systems already exist in Australia (AWB) and Canada (CWB).
 
Farm strikes
In Argentina, talk of the new agency comes amid tense negotiations between the farmers and the government to avoid a repeat of last year’s crippling farm strikes.
 
However, speculation over a possible nationalization of the grain trade fuelled an immediate and angry response from the farmers and may complicate the talks.
 
The Buenos Aires Cereals Exchange published a statement in leading papers over the weekend signed by all the regional exchanges, agricultural chambers and farm groups slamming the possibility of a nationalization of grain trade.
 
“The nationalization of grain trade will push society to the edge of another unnecessary conflict with unpredictable consequences,” the statement said.
 
The strikes of last year shut down exports and caused food shortages in the cities. The prolonged conflict also cut deeply into president Cristina Fernandez’s approval ratings.
 

Dick Ziggers

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