While the echoes from the
latest protest against the new economic measures can still be heard in different points around Argentina, agricultural producers anxiously wait for the first steps of the "productive alliance" announced by president
Eduardo Duhalde a few days ago. After ten years of "convertibility", that is, one to one parity between the Argentine peso and the U.S. dollar, last week Duhalde devalued the peso. The Argentine currency now stands
at a rate of 1 U$S to $1.70 pesos.
The local financial market as well as the seed markets have been paralyzed for several weeks, all of which has tied up not only producers but also almost every Argentine citizen.
Draconian measures such as restrictions against cash withdrawals from bank accounts have acted as the death certificate for the payment chain in the agricultural sector, which is totally lacking liquidity.
In this
context, the leaders of the four most important agricultural organizations –Argentine Rural Confederations (CRA), Argentine Rural Society (SRA), Argentine Agricultural Federation (FAA) and Intercooperative Argentine
Confederation (Coninagro)- will meet with President Duhalde with the purpose of demanding the application of a "wide agricultural policy" in order to reprogram the country's operational costs and the introduction of
agricultural activities into the national productive plan.
Different agricultural voices spoke out last week asking for help, and pointing out that some of the measures already taken have caused a negative effect on
rural activities. This was the case of the president of SRA, Enrique Crotto, who without doubting diagnosed that the devaluation will carry major inconveniencies for the sector. "Although the devaluation benefits
exporting sectors with an improvement in prices of commodities, this is not the situation of all agricultural products, such as meat, dairy products and other regional productions," described Crotto through an official
press release. He went on to reinforce his position by indicating that the devaluation raises the prices of imported inputs, which ends up causing an increase in production costs.
What are agricultural producers complaining about?
One of the claims that agricultural leaders presented to Duhalde is connected to the "pesification" of loans (the conversion into pesos of debt taken
in dollars) under U$S 100,000. Some organizations sustain that this disposition leaves out virtually all agricultural producers. The Confederation of Rural Associations of Buenos Aires and La Pampa (Carbap), for
example, has asked that in the case of small and medium exploitations this amount be raised to a minimum of between 350,000 and 500,000 U$S dollars.
Producers also complain about the coexistence of two exchange
rates, one official (1 U$S dollar = 1.40 pesos) to be used for exportations and another one to float freely and with which they must cancel the purchase of inputs. For this reason, producers say government retentions on
exportations will harm them greatly.
On of the most important problems is connected to contract sales of commodities. Agricultural producers sustain that exporters will pay futures transactions, as well as put and
call operations, at the old one to one exchange rate. The uneasiness is caused by the possibility of having exporters keeping "profits that don't belong to them, in detriment of others."
The list of demands goes on
and on, and so does the overall feeling of discomfort. In a few more days president Duhalde will have that list in his hands and will have to offer answers. At least, this is what everyone expects after his energetic
announcement of centering his new economic program around Argentina's productive sectors.
E-campo.com
