Surprise in the agricultural sector at the drop in retentions: “It was a measure taken very quickly and behind closed doors”

To analyze the government’s recent decision to introduce a new permanent reduction in export tariffs on major agricultural crops, this media contacted the former Undersecretary of State for Agricultural Markets and Adviser on Agricultural Economics, Javier Preciado Patino.

“There was no signal the week beforethe first week of December, which could indicate that something was about to happen,” said Javier Preciado Patiño. As he explained, this type of decision is usually preceded by rumors in the market, which did not happen this time.

The signs that usually precede a tax cut were absent

“Generally, there are rumorsthere are some versions that are rejected, sales slow down because it is known that withholding taxes will decrease, generally the producer stops sales or the exporter stops recording exports, and none of that happened“, he described.

Patiño focused on the way the measure was communicated and the lack of immediate regulatory support. “It was a measure taken very quicklybehind closed doors,” he said, adding: “The decree did not come out yesterdayand the official return decree was not published today.”

The need for backup

In this sense, he warned that it is not customary to announce tax changes without first having put in place the necessary administrative framework. “In general, when you announce a measure, You have already done everything regarding the administrative partand no later than the next day it will be published so that it comes into force,” he noted.

For the interviewee, in addition to the fact that the tax cut is well received in the industry, the context that drives it forward must also be analyzed. “Of course a measure like this, which is a tax cut, is presented as, well. It is part of the government’s philosophyin order to relieve tax pressure, in this case from the agricultural sector, It is well received and celebrated by everyone“, he remarked.

However, he clarified that this is the fourth change this year in export tariffs and that there are external and internal limits. “It is the fourth time this year that the issue of export duties has been changed. and this time with two restrictions“He explained. One of them is from the United States. “The one that Scott Bessent or the United States government said: enough with these temporary absencesdollar soybeans, which, say, complicate the global marketthey are destabilizing it,” he suggested.