The newly elected president of Argentina, Javier Milei, is expected to put the country back among the leaders in international agribusiness, says Felippe Serigati, a researcher at the Center for Agribusiness of the Getúlio Vargas Foundation (FGV Agro).
According to him, Argentine producers have lost ground in the global scenario in recent years due to high taxation on exported commodities — the famous retenciones — and the growth of Brazil.
The FGV Agro researcher recalls that, in addition to taxing, Argentina has even suspended its beef exports for short periods, in an attempt to keep protein prices down in the domestic market.
Now, Serigati believes that the retenciones will be abolished. A study by the Agricultural Foundation for the Development of Argentina (Fada) suggests that currency unification and the elimination of retentions and export limits could lead to a 56% growth in Argentine agricultural shipments over the next ten years, with the biggest impact in the first four years.
Total exports would go from 136 million tons to 213 million tons, adding USD 30 billion to the country’s foreign trade. Considering only meat exports, the growth would be 35% in volume and USD 4 billion in revenue.
Initially, however, the end of restrictions may pose challenges for the country’s livestock sector. This is because corn could become more expensive in the domestic market with the end of a 12% tax and the changes in exchange rate.
“The issue is that 70% of beef, 90% of chicken, and almost 100% of pork stays in the domestic market. And it is impoverished, with a loss of purchasing power. So, the livestock chains will suffer at first, but then will start to drive exports, driving prices and production in these chains,” predicts David Miazzo, chief economist of Fada.