Argentine government to force farmers to sell soy???

[Palouser]

The government's criticism is that farmers holding soy as a hedge against policies and inflation are hurting tax revenue while global prices are declining. But inflation in the country is higth and a real threat. Apparently there are policies that appear to 'allow' the government to do what it needs to force farmers to sell if their behavior is defined as 'speculating'. It all goes downhill from there. What the government might do isn't defined.

It seems possible that if bean corporations or others are encouraging or holding farmer's notes based on their beans, the government could force a repayment - moving beans onto the market. And probably encouraging farmer demonstrations and strikes. That's my uninformed reading.

[sw363535]

Luis touched on this issue in Mikes thread yesterday ---- in a little different way.  

Sounds like a little desperation on the government's part.

[Palouser]

Argentina is full of desperation - and trying to fnd a way out. They've fallen a long ways since they got into fighting communism and killing the opposition with Kissinger's and Jeane Kirkpatrick's blessings, and then stumbled into the Falklands war thinking we wouldn't object because they'd been so cooperative. Very sad.

So now, after going cold turkey from borrowed money, they continue to struggle.

[Caveman]

Well Palouser, regarding the goverment-farmers issue, I'd say we haven't reached the breaking point, where grains get confiscated... yet.

Goverment officials tend to "remind" farmers, elevators and exporters that they have enough legal power to force sales, a law was passed recently allowing it, but also assure that it is the last resort they expect to use.

The official speach says that there won't be any devaluation, because there's no need. Therefore, holding grains serves no porpose, even more in a context where commodities prices are falling.

The goverment needs the money from soybean exports, and needs it as fast as possible, but to actually confiscate soybeans from it's owner would imply crossing a line against private property in a way they, so far, haven't (yes, the took YPF by force, but that isn't quite the same story). And I'm not sure they want to do that. 

I wouldn't expect any forced sales for the moment.

On the other hand, the goverment is speaking about the idea of creating a estate run company that acts as an exporter. The company wouldn't be the only buyer in the market (like CWB used to be), instead, would compite with others, and would have some benefits to make it more attractive, such as giving it preferencial export taxes, thus increasing it purchase power. 

This idea has appeared in the news papers during this week. This seems a bit more likelly, but it's not going to happen in short term.

Regarding our "fall" from those days you speak of is, that's something I wouldn't discuss in a grains marketing forum. But I will say that we do continue to struggle with our past choices, regardless they were right or not.

[sw363535]

Thanks caveman ---- much appreciated 

I also will avoid Pal's personal political issues.

Been telling myself for years that my biggest failure has been not borrowing enough money... 🙂