The Argentinean government keeps 93.5 percent of the profits generated by the agricultural industry, according to the latest report by the Foundation for Agricultural Development in Argentina (FADA) released on June 25. High taxes, inflation, and a drop in international commodity prices, such as soybeans, corn, and wheat, are among the reasons cited for this heavy burden.Up from a mere 75% just a few years ago! Thanks to government intervention;
The 93.5 percent that the government takes is distributed between national and provincial taxes, as well as the “intervention costs” that force producers to sell wheat and corn below their international price levels because of their abundance in the local market.So, naturally, Argentina's farmers have little to no incentive to grow those crops--with catastrophic consequences for the soil, in the long run. However;
“Soybean has a great advantage, because [in Argentina], no one eats it. They are not going to restrict exports on that,” he [Aldo Abram, director of the Liberty and Progress Foundation] says. Abram adds that soybean may be “the answer to the distortions caused by the government” and its attempts to “squeeze the agricultural industry.”Soy for me.