We got invitation to spend another evening with the Fossati family that showed us around their farm in the Catrilo area called Don Pancho. After the tour they hosted another party for us with many of their family and friends. Before the huge meal including pork, beef, and lamb we got to sit down and talk ag policy with the Fossati's and our Argentina interpreter Alejandro Cassella.
As we have learned during our time here the Argentina government is very challenging for the farmers to work with and the taxes are very high. We talked about the SENSA program deals with the animal identification system. Technically producers are not forced to be part of the program but if they choose to not take part you don`t have the option to export any livestock. They told us that they have a ton more paperwork than we can even imagine. They have to pay for the seals that have to go on every load of livestock that is transported and the tags that every animal has to have. They also have to pay for the processing of all the paperwork.
Some of the taxes they have is taxes to the province and the federal government for transportation. They are told they are suppose to fix the roads with those tax dollars but they never see any of that happen, which just confirms to the producers the idea that their government is corrupt and a lot of the money goes to the politicians. For crop taxes they have a figure-of-speech which says for every 3 trucks loads of soybeans, one goes to government, the other two are taxed at 35%. In 2008 there was a farmers rebellion because the government threatened over 40% of profit for taxes. The rebellion was seen all across the country. Farmers would set up road blocks so no agricultural products could get into Buenos Aires. Milk trucks are stopped and dumped on the side of the road and the government taxes still stayed at 35%.
All purchasing is done with all cash, credit does not exist at all and has not for 20 years. If producers wanted to take out a loan in would be 25% interest. They commented their government runs in a way that instead of killing a program all together, it will just set it up for failure and make it impossible to use. Many producers are jumping into the livestock because livestock policy is easier to change than crops.
Their inflation rate is now and is expected to continue at 40% annually, which is mind-blowing because in 2001 it was at 0%. A lot of money in the world is waiting for Argentina to change policy so they can start investing in the country. This country and their producers have such huge possibilities if policy would change. China is looking to invest at the right time.
Argentina could be a powerhouse country if the power goes into the right hands.
Written by Joshua Terveen
Our new Argentine friends and hosts allowed us to ask them many questions in a roundtable discussion about Argentina Agriculture and culture. Participating was Nacho of Don Lado farm, Raul Fossati of Don Pablo, Alejandro Cassella our interpreter and Christian M., veterinarian for Don Pablo farms.
SDSU Students participating in the roundtable discussion. They were even asked by our Argentine hosts their view of agriculture since their visit and suggestions they had to improve agricultural challenges in Argentina.
