Government grant to poultry businesses and mills draws criticism from rural residents
The national government will create a trust to subsidize mills and poultry companies, in order to stabilize the prices of bread and chicken, a measure similar to that already taken years ago, under the chairmanship of Cristina Fernandez de Kirchner.
The initiative, which had already been leaked by an official project, was confirmed by the Minister of Agriculture, Julien dominguez, to the Chief of Staff, Juan manzur, who received it this Monday in his office at Casa Rosada. There, DomÃnguez informed him of the agreements reached with the tables of wheat and corn, in order “to achieve a balance in the prices of popular consumer products such as bread and chicken”.
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According to the chief of staff’s statement, the minister informed Manzur of âthe confidence that the private sector will put in place to guarantee the prices of wheat and corn. He will have meidentical characteristics to the instrument used with sunflower oil â.
“This tool, administered and audited by the private sector, is a counter-cyclical measure to guarantee price stability for Argentine consumption”, as the government indicates.
“In the morning, I received Minister DomÃnguez, with whom we worked on measures that allow us to guarantee price stability in the domestic market and access to popular consumer products,” Manzur said after meeting The Minister.
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Regarding the creation of the trust, DomÃnguez underlined that this tool guarantees that âin the event that during the financial year 2022-2023 there is an increase in international prices, both chicken and bread in Argentina are guaranteed at the required prices â.
âThe private sector has accepted, through this measure, quantity of tonnes that must be guaranteed to supply the internal market in 2022 and 2023â³, As reported by Cabinet headquarters in connection with a week the government established “equilibrium volumes” for exports of both crops, which created strong resistance in much of the agricultural sector.
In this sense, DomÃnguez underlined that the agreements with the chain concerning the quantity of tons to be produced are important because “in this way, the point of equilibrium between the internal market and the external market is fixed in a resolution”.
Regarding the “Agricultural counter-cyclical fund”, as it is called in the project that emerged, the Ministry of Agriculture is working on a scheme with contributions from exporters exceeding $ 14,000 million and that the grain processors would charge.
In the document that has been distributed, it is also indicated that the cost of 3.13 million tonnes of wheat and 1.5 million tonnes of corn. Thus, the initiative would be used to subsidize bags of 25 kilos of wheat flour, whole chicken, packages of one kilo of flour, and those of dry noodles of 500 grams.
Rejection of the ruralistas
In principle of the Link table (CRA, Coninagro, Rural Society and Agrarian Federation) have expressed their resistance to the measure.
The president of Coninagro, Carlos Iannizotto, assured TN: “Although I do not know the project in depth, I can anticipate that We do not see at all that everything related to subsidies is appropriate. Here there is a specific problem which is inflation. As long as there is no predictability and stability, all the support they want to achieve will be liquefied â.
In this regard, he added: “Assuming the subsidy is well done, what good would it be if there was an inflation forecast above 60%, even though GuzmÃ¡n (MartÃn, Minister of the Economy ) says it will be 30%. In this context, it is irresponsible to talk about subsidies. There is no subsidy that can support this inflation no possibility of helping anyone, because everything liquefies. There is an enemy here that the government does not detect and use in its favor, because it adapts to rising prices â.
Read also Agribusiness corn chain complained to government that export restrictions “affect predictability”
Argentinian rural confederations (BOW) they also questioned this pattern. Your president, Jorge Chemes, estimated: âAny intervention mechanism, we think it’s impractical. We have to let the markets function normally. In addition, these methods attempt to protect other links in the chain. We don’t know in detail how it would work, but the reality is that any intervention generates a distortion, and with that we do not agree â.
Likewise, Chemes evaluated: âThe grant gets you to benefit from it, but ends up hurting another link. And, from what we’ve seen in history, production is what always ends up subsidizing othersâ.
Meanwhile, the vice-president of this entity, Gabriel de Raedemaeker, said: âThis is another example of the regulatory vocation of the national government, which ends up harming production and consumers. Because this type of restrictions on corn and wheat, which have never had supply problems on the domestic market, generate disincentives to production and investment, and ultimately a drop in productivity. This ends up generating an increase in the prices of the final products, contrary to the argument that the ruling party uses to implement these distortions. This also carries a patronage for certain friends, who end up being the big ones favored by this type of maneuver â.
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