Argentina slashes import taxes on herbicides to boost agriculture

Chaco, Argentina, October 22, 2022: Aerial view of combine harvester unloading grain in cargo trailer working during harvesting season on large ripe wheat field in Argentina.

The Argentine government has announced a significant reduction in import taxes on herbicides, a move aimed at supporting the country’s vital agricultural sector. The measure, announced by Minister of Economy Luis Caputo, will see tariffs on herbicides formulated with Atrazine, Glyphosate, and 2-4-D slashed from 35% to 12.6%, aligning with the common external tariff of the Mercosur trade bloc.

According to the announcement, import tariffs on primary Atrazine will be reduced from 24% to 10.8%. The government hopes that this move will translate into lower costs for farmers and boost the country’s agricultural productivity.

The decision has elicited mixed reactions from various stakeholders within the agrochemical industry. While some have adopted a cautious stance, awaiting the publication of the official decree to fully assess its impact, others have voiced concerns and criticism.

Distributors, manufacturers, and local producers argue that the measure will have an insignificant effect and create unfair competition for Argentine national production. The Argentine Chamber of Fertilizer and Agrochemical Industry (CIAFA) commented that, based on the announcement, the measure could adversely affect local synthesis and formulation factories.

On the other hand, the Northern Producers Association (Apronor) welcomed the move, stating, “It does not favor the agricultural sector. It favors the country in any case. Unfortunately, these are crumbs compared to how much they plundered us throughout our homeland.”

The tax reduction is said to have been prompted by demonstrations from the Argentine Rural Society and the Buenos Aires Grain Exchange, which raised concerns over the need to reduce taxes to stimulate the current wheat campaign. However, stakeholders in the herbicide sales chain have pointed out that the products for the current season are already available, and the reduction may have a more significant impact on future campaigns.

As the agricultural sector grapples with the implications of the government’s decision, it remains to be seen whether the tax cuts will achieve their intended goal of boosting productivity and supporting farmers, or whether they will create unintended consequences for the domestic agrochemical industry.

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