Argentina: Nationalized grains?

Just in case you don't know what world class silo areas look like these days. Forget those
quaint free-standing towers, this is the real deal.

Today I got this in my mailbox, kindly sent along by regular reader "Patria Grande".

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Argentina: May Nationalize Grain Commerce

February 27, 2009

Argentina’s government is considering the nationalization of its grain commerce, La Nacion reported Feb. 27. Federal Administration of Public Income (AFIP) chief Ricardo Echegaray said the government agency would purchase all of Argentina’s grain, flour, and oil production and ensure that domestic demand is met before exporting the remaining quantities. The National Office of Agriculture Commerce Control currently administers grain exports.

http://www.lanacion.com.ar/nota.asp?nota_id=1103824&pid=5913804&toi=6259

Any comment on this, Otto?

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Here's my comment: Right now the Argentine gov't is sat down with "El Campo" trying to work out a new deal on taxes. Both sides have made their point fairly, and away from some of the more inflammatory rhetoric the Campo says that the high tax regime is killing them now that the prices for Soya, Corn, Wheat etc are off their highs. They do have a point. Also, the gov't has been fair with them in this round of talks, it has to be said. There's a new deal on the table now that gives farmers a break (quite literally).

But the gov't is also mightily annoyed that most of the big agro players (and the co-operatives too) are just storing a lot of the grain and waiting for a combo of a new tax deal and higher market prices. With so much grain just sitting in silos the gov't isn't getting its tax income for sales abroad, hence the threat that Patria Grande sent along. The gov't will moan about "domestic demand" but that's just so much BS. Klishtina isn't worried about Buenos Aires bakeries running out of bread (cos they won't) and much more worried about the state coffers running out of moolah.

The bottom line is that for the moment it's a bit of posturing by the Argentina gov't to get the deal struck, but it's also a move that has a set of back teeth. If the agro boyz try to push the limit this threat could turn into action. So right now it's something to keep an eye on and not make into screaming NYT polemic headlines. The politics of soybeans.

UPDATE: I note Bloomberg is running the story too. True to Bloomie form, even in what passes for a 'report' it manages to quote just one side of the story and genuflects at the altar of free trade. Why doesn't anyone care for reporting the story as it is instead of shilling any more? If it bleeds it leads, that right?

From a Porteño viewpoint: El Campo

El Porteño is making a quick return this week. This is good news as far as Otto is concerned because 1) his views are sharp and 2) it means I don't need to think, just translate a few lines and hey presto! decent and original content.

Today's missive from the heart of Buenos Aires concerns "El Campo", which can be translated as "the country / countryside" "the rural area" , "the farmers / farmworkers", "agriculture" etc etc. Before we get to El Porteño's words, I'll add that since last year's successful agro protest campaign against the Klishtina gov't the Campo has continued with its complaints, and as you'll gather from the words underneath the initial support from the general population has been waning significantly.

So on with the show, and here's El Porteño. Enjoy.

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A Short Complaint Against the Campo

It's about time that small rural producers in Argentina realize they are being used by 20 or so large agro players. They send them to picket and strike while the big boys take off to Punta del Este (Ottonote: high-end beach resort in Uruguay) or Europe. The landed families don't even know what work is. They are people that haven't done a day's work in the last 150 years, they just live off their inheritances and lobby the government of the day (if it's friendly) or with the opposition (if not) or with their media buddies. Doesn't anybody realize that it's been this way in Argentina since the 19th century?

Due to the nature of my job I have quite a lot of contact with the 'Campo' and know without a single doubt that the big boys have made piles of money in the last five years. It's got to the point that they have so much ready cash they don't know what to do with it, as its also undeclared (ottonote: known in Spanish as "black") money. With the crisis that's coming they should shut their mouth and get to work. I'm fed up with them, they tire me out. They don't have the support of the population now, either.

We all have our problems, we pay our taxes and we muddle along on our own. They have to change their strategy, as more and more people are getting tired of their discourse. If their accounts don't square they don't sow, and they don't come along later with the argument of how there will be a food shortage, either. The fat cats don't sow and harvest out of love for their country, they only do it because they make a lot of money.

Enough of this hypocrisy. If any other industrial sector goes wrong, the businesspeople are screwed, they lose their investment and have to start over again. Nobody asks the government for help if things go wrong and we all pay our taxes in good times and bad. What's so special about the landed gentry of El Campo?

Firma y sello, El Porteño

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