Antonela SemadeniEconomist at the Agricultural Foundation for the Development of Argentina (FADA), explained in dialogue with Channel E How agricultural income is distributed and why the tax burden remains a critical factor for the sector.
The latest report from the Agricultural Foundation for the Development of Argentina (FADA) placed renewed focus on the fiscal pressures facing the agricultural sector. According to December data, 56.3% of farm income goes to paying taxes, a figure far higher than what the producer ultimately receives.
“A producer earns income from the sale of the crop, but he also incurs expenses such as fertilizers, inputs, labor, freight and machinery,” he explained. Semadeni. In this context he stated: “The difference between income minus expenses is what we call economic output or agricultural income.“.
This income is distributed unevenly: the state keeps more than half, while the producer barely has a small margin. “On average, for the four main crops at the national level, 56.3% goes to tax payments, 28% to rent and only 16% remains to the producer’s economic result.“, emphasized the economist.
National taxes: The biggest burden on agriculture
One of the key points of the report is the weight of national taxes, particularly non-divisible taxes. “This type of report shows that 56% are non-divisible national taxes, such as: B. Withholding taxes“, he emphasized SemadeniIt highlights where the focus of the tax debate should be.
Furthermore, he stated: “37% corresponds to national co-participating taxes such as VAT and profits; 6% on provincial taxes and only 0.7% on municipal taxes“This distribution makes it clear that the decisions of the national government are crucial to the viability of the sector.”
Another important factor is the lease of the property. “In the central Pampas region, 70% of the fields are leased” he hinted Semadeniwhich further reduces the manufacturer’s margin. And he added: “We have been measuring this index since 2007 and it is almost always above 60%, and in drought years it is even above 90%.“.
Cultures and Provinces: Profitability makes the difference
The report also analyzes impacts by crop. “We saw improvement in soybeans, corn and sunflower, but an increase in the index in wheat“, he explained Semadeni. The reason: “We had a record wheat crop, there was an oversupply and the price fell by almost $20“.
Regarding the provinces, he clarified that a higher index does not always mean more taxes. “It has to do with profitability: the lower the economic result, the higher the weight of taxes“He said. This is why provinces with less productive lands have higher tax rates, even with similar tax systems.
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