Argentina could grow 70m mt of soybeans with tax cut: ACSOJA

Argentina could potentially produce 70 million mt of soybeans within a decade if the government implements the right conditions, including cutting the tax burden, the head of Argentine soybean association ACSOJA Luis Zubizarreta, told Agricensus.

“The current tax burden is huge and also negatively impacts the capacity of the government to collect tax from soybean producers as farmers produce less as a consequence of export duties. A lower tax burden will result in a higher soybean production, resulting in a higher tax collection by the government,” Zubizarreta said.

The executive also highlighted use of more technology, improved seeds and investment in logistics.

Zubizarreta added that the goal of achieving soybean production of 70 million mt could be achieved with a limited increase in the area without affecting the environment, with much of the increase coming from higher yields.

During the ACSOJA conference on September 22, the newly appointed agriculture minister, Julian Dominguez, said that the government and the rural sector needed to work together to set a goal of reaching soybean production of 70 million mt.

Soybean export duties for the largest producers currently stand at 33% while export duties for soymeal and soyoil stand at 31%, with the government recently sending its draft 2022 budget bill to Congress last week.

It included an article to extend government powers to manage grain export duties until the end of 2024.

The powers are currently set to lapse at the end of this year, but the change is planned so that the government can extend the power for another three years - beyond the span of the current president, Alberto Fernandez.

According to the latest update by the Rosario Grain Exchange (BCR), soybean production in the 2021/22 cycle would reach 48.8 million mt, with an expected area of 16.2 million ha, the lowest area in the last 15 years.

In the previous cycle, the country produced 45 million mt of soybean with an overall area of 16.9 million ha.