Agricultural Policy Monitoring and Evaluation 2020

3. Argentina

Support to agriculture

Argentina provides negative support to its agricultural sector mainly due to export taxes that depress domestic producer prices. Estimated producer support was negative at ‑21.4% of gross farm receipts in 2017-19. Budgetary payments to producers are limited and focused on input support, provided mainly in the form of credit at preferential rates.

Agricultural production and exports in Argentina have been growing dynamically in the last two decades due to an innovative private sector, and to public services, particularly for knowledge, research, extension and sanitary inspection. Most of Argentina’s budgetary support to the sector goes to these general services (GSSE). However, the total budgetary support to farmers and the sector overall (TBSE) was only 0.1% of GDP, well below the absolute value of negative market price support, making the total support estimate to agriculture (TSE) also negative, representing -1.8% of GDP.

Main policy changes

In December 2019, the new government re-established a separate Ministry of Agriculture, Livestock and Fisheries. The Ministry of Social Development created a new social programme “Argentina against hunger” in January 2020. This provides monthly financial support to current beneficiaries of social welfare through an electronic “Food card” allowing buying all categories of food products up to the value of a basic basket including dairy, vegetables, meat, and other fresh foods.

The National Plan against Food Waste and Losses set up a Register of institutions that are eligible to receive food products for their free distribution to final consumers. Moreover, a new law limits the responsibility of the food donor in order to facilitate donations that could otherwise be discarded, while ensuring conformity with the Argentine Food Code.

Several government initiatives have focused on improving the application of agro-chemicals. A resolution from the plant and animal health agency SENASA establishes a list of restrictions on the use of active agro-chemical principles. The former Ministries of Agro-industry and of Sustainable Development approved a joint resolution to create an inter-ministerial working group on Good Practices on Pesticides Applications. Finally, the new Action Plan on Bio-inputs involves all actors from the public and private sectors to develop alternatives and complements to chemical products.

In June 2019, the European Union and Mercosur (Argentina, Brazil, Paraguay and Uruguay) reached a free trade agreement. The agreement includes several provisions for increasing market access of Mercosur agricultural products – including beef, poultry, pork, sugar, ethanol and cheese – into the European Union.

Assessment and recommendations

• Export taxes create distortions and uncertainty. However, in response to the macroeconomic turmoil in September 2018, a new tax was established on all exports that should be phased out as part of a long-term government plan of integrating the sector into a reformed economy-wide tax system and enhancing policy certainty with alternative sources of fiscal revenue. In the current environment, it will be crucial to reduce uncertainty and find the right balance between the long-term objective of reducing export taxes and the short-term needs to raise fiscal revenues.

• Historically, Argentine policies have been unpredictable and biased against agriculture. Agricultural policy could be better anchored in broad legislation, such as a specific framework law and an economy-wide reform of the tax system, keeping a long-term direction of gradually moving towards a more neutral, stable, predictable and targeted policy package.

• The new social programme “Argentina against hunger”, providing monthly financial support through an electronic card, needs to be well targeted to the population in need. In order to tackle food poverty, this approach through social policies is more effective and efficient than trade measures that depress domestic prices of primary food commodities which represent just a small share of food expenditures.

• Recent measures to improve the application of agro-chemicals are a step in the right direction towards creating awareness and the identification of science-based principles and practices. Moving forward, in particular on pesticide use, will require improving monitoring and information systems for better policy design, such as on location-specific negative externalities and hotspots from pesticide use.

• In order to deliver the research, extension and other public goods required for future agricultural innovation, the Argentine agricultural innovation system needs to develop systematic monitoring of efforts and results in R&D and innovation, and to define and implement strategic priorities. Public policies on innovation should focus on the provision of public goods in areas where the private sector has difficulties to deliver, such as those related to sustainability and less developed value chains, or for regional economies outside the Pampas region.

• The Special Tobacco Fund (FET), with a budget similar to that of the National Institute for Agricultural Technology INTA, should be reformed. The output payments to tobacco producers should be phased out and resources used to finance a programme for the development of poor tobacco producing areas through investment in human and physical capital. The reform should include a monitoring and evaluation system of all the initiatives implemented by the provinces.

• Argentina’s Nationally Determined Contributions (NDCs) under the 2016 Paris Agreement sets a goal to reduce GHG emissions by 18% in 2030 compared with projected emissions for that year. No specific target has been defined for agriculture. Among the main measures affecting the agricultural sector are the Native Forest Law, the improvement of soils through practices such as no-tillage, and the substitution of fossil fuels by biofuels. Further scope exists for Argentina to strengthen the contribution of agriculture, forestry and other land use (AFOLU) to its climate change mitigation efforts.

Policy responses in relation to the COVID-19 outbreak

Agricultural policies

Decree 297/2020 of 19 March establishing compulsory social distance measures includes the production, transportation and trading of food and agricultural inputs such as fertilisers in the list of essential sectors not subject to the limitations of lockdown measures. The tax agency AFIP established on 23 March that customs services will prioritise operations of essential products, which includes all food related products.

The Ministry of Agriculture Livestock and Fisheries together with other Ministries (Health, Labour and Transport) and with the chambers of commerce work together on a harmonised set of protocols to be used in all food related enterprises. Manuals per branch of activity are being drafted to minimise the risk of contagion.

There have been some operative difficulties related with protecting the health of the workers, coinciding with the end of the summer harvest. This included the temporary closure of some export terminal facilities in mid-March that were reopened per government decree on the 23 March. These difficulties have been rapidly tackled by the Ministry of Agriculture Livestock and Fisheries and other government agencies to ensure fully operative international agro-food trade.

The Southern Agricultural Council (joining Argentina, Brazil, Bolivia, Chile, Paraguay and Uruguay) made a joint declaration on 24 March guaranteeing the secure transit of trucks across their borders.

Figure 3.1. Argentina: Development of support to agriculture

Note: * Share of potentially most distorting transfers in cumulated gross producer transfers.

Source: OECD (2020), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.

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Support to producers (%PSE) has remained negative in the last two decades, with large fluctuations: ‑11.9% of gross farm receipts in 2000-02; reaching extreme negatives in 2008 with ‑51.1%; then back to -10.3% in 2017; and more negative numbers since the beginning of depreciation of the peso and economic recession in 2018, with -24.5% in 2017-19 (Figure 3.1). Negative market price support is the main component of the PSE and, as a result, 98% of the policy transfers were most distorting in 2017‑19. The change in the price gap, and in particular the depreciation of the exchange rate, is the main driver of the expansion of the negative PSE in 2019 (Figure 3.2). The ratio of producer to border price (NPC) is as low as 0.79%, that is, producers’ prices are on average 21% below world market prices. The support to general services (GSSE) relative to agricultural value added has increased from 0.8% in 2000‑02 to 1.6% in 2017-19, not enough to avoid a negative Total Support Estimate (TSE) of -1% of GDP in 2000-02 and -2% in 2017-19. Negative market price support is dominated by the main export product soybeans but concerns several other commodities, including meat and milk (Figure 3.3).

Figure 3.2. Argentina: Drivers of the change in PSE, 2018 to 2019

Source: OECD (2020), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.

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Figure 3.3. Argentina: Transfer to specific commodities (SCT), 2017-19

Source: OECD (2020), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.

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Table 3.1. Argentina: Estimates of support to agriculture

Million USD

	2000-02	2017-19	2017	2018	2019p
Total value of production (at farm gate)	17 022	42 887	38 935	48 261	41 464
of which: share of MPS commodities (%)	85.7	83.9	83.9	83.7	84.1
Total value of consumption (at farm gate)	7 998	28 522	24 212	33 745	27 609
Producer Support Estimate (PSE)	-1 035	-9 422	-4 040	-12 488	-11 738
Support based on commodity output	-1 069	-9 644	-4 371	-12 712	-11 850
Market Price Support1	-1 131	-9 719	-4 477	-12 786	-11 894
Positive Market Price Support	150	300	391	245	265
Negative Market Price Support	-1 280	-10 019	-4 868	-13 031	-12 158
Payments based on output	62	75	106	75	44
Payments based on input use	34	216	321	218	109
Based on variable input use	2	11	21	10	1
with input constraints	0	0	0	0	0
Based on fixed capital formation	23	152	219	152	84
with input constraints	0	0	0	0	0
Based on on-farm services	8	53	81	55	24
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	6	10	6	3
Based on Receipts / Income	0	0	0	0	0
Based on Area planted / Animal numbers	0	6	10	6	3
with input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	-11.9	-24.5	-10.3	-25.7	-28.2
Producer NPC (coeff.)	0.89	0.79	0.89	0.78	0.77
Producer NAC (coeff.)	0.89	0.80	0.91	0.80	0.78
General Services Support Estimate (GSSE)	116	408	606	374	245
Agricultural knowledge and innovation system	66	213	305	210	123
Inspection and control	33	126	171	114	92
Development and maintenance of infrastructure	17	68	125	48	29
Marketing and promotion	0	3	5	2	1
Cost of public stockholding	0	0	0	0	0
Miscellaneous	0	0	0	0	0
Percentage GSSE (% of TSE)	..	..	..	..	..
Consumer Support Estimate (CSE)	456	6 301	1 454	9 227	8 222
Transfers to producers from consumers	483	6 751	1 740	9 740	8 772
Other transfers from consumers	-6	-1	-6	-4	9
Transfers to consumers from taxpayers	0	0	0	0	0
Excess feed cost	-21	-449	-280	-509	-559
Percentage CSE (%)	12.6	25.4	6.0	27.3	29.8
Consumer NPC (coeff.)	0.88	0.79	0.93	0.78	0.76
Consumer NAC (coeff.)	0.89	0.80	0.94	0.79	0.77
Total Support Estimate (TSE)	-919	-9 014	-3 433	-12 114	-11 493
Transfers from consumers	-477	-6 750	-1 733	-9 736	-8 780
Transfers from taxpayers	-436	-2 263	-1 694	-2 374	-2 722
Budget revenues	-6	-1	-6	-4	9
Percentage TSE (% of GDP)	-1.1	-2.0	-0.5	-2.3	-2.6
Total Budgetary Support Estimate (TBSE)	212	705	1 043	672	400
Percentage TBSE (% of GDP)	0.1	0.1	0.2	0.1	0.1
GDP deflator (2000-02=100)	100	3 164	2 092	2 943	4 458
Exchange rate (national currency per USD)	1.70	30.97	16.56	28.11	48.23

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income.

1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Argentina are: wheat, maize, soybean, sunflower, fruit and vegetables, milk, beef and veal, pig meat, poultry and eggs.

Source: OECD (2020), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.

Contextual information

Argentina is an upper middle income country with an efficient agricultural sector that makes a growing contribution to the GDP, from 4.7% of the GDP in 2000 to 6.1% in 2018. In contrast, agriculture’s share of employment is decreasing and well below 1%, with a high degree of mechanisation of production in the Pampas region. The country is one of the world’s largest agricultural exporters, and agro-food exports have been growing significantly in the last decades, representing 42% of total exports in 2000, and 51% in 2018, almost eight times the average share across all countries in the report. In contrast, agro-food imports represent only 7% of total imports.

Argentina has abundant agricultural land representing 5% of the total agricultural area of all countries covered in this report, although a large share constitutes pasture land. The share of livestock in the total value of production was 36% in 2018.

Table 3.2. Argentina: Contextual indicators

	Argentina		International comparison
	2000*	2018*	2000*	2018*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	439	917	1.1%	0.8%
Population (million)	37	44	0.9%	0.9%
Land area (thousand km2)	2 737	2 737	3.4%	3.3%
Agricultural area (AA) (thousand ha)	128 510	148 700	4.3%	5.0%
			All countries¹
Population density (inhabitants/km2)	14	16	53	62
GDP per capita (USD in PPPs)	11 917	20 611	9 275	21 924
Trade as % of GDP	9	12	12.4	15.3
Agriculture in the economy			All countries¹
Agriculture in GDP (%)	4.7	6.1	3.1	3.6
Agriculture share in employment (%)	0.7	0.1	-	-
Agro-food exports (% of total exports)	41.5	50.9	6.2	7.3
Agro-food imports (% of total imports)	5.4	7.0	5.5	6.3
Characteristics of the agricultural sector			All countries¹
Crop in total agricultural production (%)	59	64	-	-
Livestock in total agricultural production (%)	41	36	-	-
Share of arable land in AA (%)	22	26	32	33

Notes: *or closest available year.

1. Average of all countries covered in this report. EU treated as one.

Sources: OECD statistical databases; UN Comtrade; World Bank, WDI and national data.

The Argentine economy began to stall when the peso came under pressure in April 2018. The value of the peso vis-à-vis the USD was reduced by half in 2018 and by a further third in 2019, plunging the economy into recession and inducing high annual inflation rates above 40% during these two years. In 2018, the International Monetary Fund and Argentina reached a USD 57 billion financing agreement.

The agro-food trade surplus was above USD 30 billion in 2018. Most of agro-food exports (74%) are primary or processed products used as inputs in downstream industries abroad, whereas the much smaller bundle of agro-food imports is mostly concentrated in primary products for the industry.

Figure 3.4. Argentina: Main economic indicators, 2000 to 2019

Sources: OECD statistical databases; World Bank, WDI and ILO estimates and projections.

Figure 3.5. Argentina: Agro-food trade

Note: Numbers may not add up to 100 due to rounding.

Source: UN Comtrade Database.

Argentine agricultural production has increased at an annual rate of 2% between 2007 and 2016, similar to the world average. Out of this total growth, 0.6% was due to an increase in intermediate inputs, while the bulk of production growth (1.4%) was due to Total Factor Productivity (TFP), that is, innovations and technical improvements in the way resources are used in production. The contribution of TFP to production growth is slightly below the world average.

Agricultural nutrient balances in Argentina are below the OECD average and slightly negative. The shares of agriculture in energy use and in greenhouse gas (GHG) emissions are, at 6.4% and 30.6% respectively, well above the OECD average, related to the importance of the sector in GDP and the large number of ruminants.

Figure 3.6. Argentina: Composition of agricultural output growth, 2007-16

Note: Primary factors comprise labour, land, livestock and machinery.

Source: USDA Economic Research Service Agricultural Productivity database.

Table 3.3. Argentina: Productivity and environmental indicators

	Argentina		International comparison
	1991-2000	2007-2016	1991-2000	2007-2016
			World
TFP annual growth rate (%)	1.7%	1.4%	1.6%	1.6%
			OECD average
Environmental indicators	2000*	2018*	2000*	2018*
Nitrogen balance, kg/ha	-1.4	-5.7	33.3	29.1
Phosphorus balance, kg/ha	2.0	-0.1	3.3	2.3
Agriculture share of total energy use (%)	5.4	6.7	1.7	2.0
Agriculture share of GHG emissions (%)	40.5	30.6	8.1	8.9
Share of irrigated land in AA (%)	..	1.6	-	-
Share of agriculture in water abstractions (%)	..	73.9	46.0	49.0
Water stress indicator	..	..	9.9	8.9

Notes: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Description of policy developments

Main policy instruments

In addition to the Ministry of Agriculture, Livestock and Fisheries, other government agencies also implement policy measures providing support to agriculture in Argentina, such as the Ministry of Finance that designs and implements export taxes. In contrast to most other countries covered by this report, producers of main agricultural products in Argentina are implicitly taxed through negative price support. Export restrictions have had, and continue to have, a major impact in depressing producers’ prices below international references and creating negative transfers to producers. The government made efforts to reduce export taxes between 2015 and September 2018, but introduced a new tax of 12% on all exports and of 30% on soya, oriented to raising fiscal revenue in September 2018. The export tax rates can be and are adjusted by the government through a decree. These measures remain the major component of policy transfers from the agricultural sector. Argentina provides only few payments to farmers. Highly distorting measures are limited to the mentioned export taxes and specific output payments to tobacco producers.

Budgetary programmes are concentrated on financing the provision of general services such as the agricultural knowledge and innovation system or inspection control services, which represent the majority of budgetary support in Argentina. Research and development and extension services are mainly provided by the National Institute for Agricultural Technology INTA, while animal and plant health and input control services are provided mainly by the plant and animal health agency SENASA.

The Special Tobacco Fund (Fondo Especial del Tabaco FET) provides a supplementary payment to market prices as part of a broader policy arrangement. Created in 1972, the FET (Decree Law 19.800) provides this additional revenue to tobacco producers located in the northern provinces of Jujuy, Salta, Misiones, Tucuman, Corrientes, Chaco and Catamarca. These provinces are dominated by small producers with economic and social difficulties. The fund is financed by a tax of 7% on tobacco retail consumption prices (excluding IVA) and the interests and other revenue generated by the fund, and is directly managed by the Ministry of Agriculture, Livestock and Fisheries. The federal government transfers 80% of the funds to the tobacco producing provinces proportional to their share in national production. Historically, in accordance with the provisions of Law 19800, that percentage of the funds goes to the so-called FET amount used by the provinces to supplement prices to producers. However, after the signature of the WTO agreement in 1994, Argentina committed to reduce this support as part of its Aggregate Measurement of Support (AMS) commitment, constraining FET output payments expenditure to the equivalent of USD 75 million, with the rest being spent on programmes to provide technical assistance, to invest in local infrastructure and even to provide social and health assistance.

Argentina provides very limited input subsidies, mostly in the form of implicit interest rate subsidies through preferential credit provided by a set of programmes under FINAGRO. These credits are targeted to a range of products to finance investment and working capital. A new fund, FONDAGRO, was created in 2017 to finance investment in the sector at preferential interest rates, but its current scope is limited.

There are almost no other direct payments to producers in Argentina. Limited amounts are provided as disaster assistance in response to extreme weather events, mainly droughts. There are no national direct payments for agri-environmental services, and few at provincial level.

The Agricultural Provincial Services Programme (PROSAP), financed with loans by the Inter‑American Development Bank (IADB) and managed by the Ministry of Agriculture, Livestock and Fisheries, invests mainly in large agricultural irrigation infrastructure.

Argentina submitted its Nationally Determined Contributions (NDCs) under the Paris Agreement on Climate Change in October 2016. Argentina’s goal is to reduce GHG emissions by 18% in 2030 with respect to projected emissions for that year. Among the main measures affecting the agricultural sector in response to the commitments made in the Argentine NDCs are the Native Forest Law (Law 26.331), the improvement of soils through practices such as no-tillage, and the substitution of fossil fuels by biofuels.

The agriculture and livestock sector contributes to 28% of total GHG emissions in Argentina. The National Plan for Agriculture and Climate Change and the inventory of agricultural emissions monitor the contribution of the sector to the country’s mitigation efforts under its NDCs commitments. The plan includes the following measures to reduce emissions from agriculture: increasing the application of crop rotation; promotion of grass fed livestock for capturing carbon; and generation of thermic energy with biomass (PROBIOMASA). Law 25080 that promotes new forest plantations to act as carbon sinks, was extended for a new ten-year period.

Argentina is a large exporter of biodiesel produced from soya and has an active biofuel policy. The Biofuel Law 26.093, approved in 2006, established compulsory blend mandates since 2010, starting at 5% but then progressively increased to 10% for diesel and 12% for gasoline. The law also assures the purchase of biofuels at a calculated price up to the end-term of the law in 2021. Biofuel production can also benefit from some fiscal concessions. First, exports of biofuels have historically been taxed less than the export of crops, in particular soybeans. Second, the law establishes that domestic consumption of biofuels benefits from a VAT rebate under certain conditions.

Since January 2020, a new social programme “Argentina against hunger” provides financial support for children, pregnant women and disabled people. Support is channelled through an electronic food card to be used in any store to buy food products.

Domestic policy developments in 2019-20

Economic and policy uncertainty was high in Argentina during 2019, with economic recession and a general election in October. The peso continued to depreciate losing an additional third of its value, inflation exceeded 50% and public debt was expected to exceed 90% of GDP by end-2019, while being highly sensitive to exchange rate movements as over 75% of public debts are nominated in foreign currency. The resulting liquidity challenges have led to a re-profiling of short-term debt and the reinstatement of currency controls in mid-2019. In April 2019, in order to curb inflation, Argentina fixed retail prices of agro-food products, including rice and wheat flour products. The newly established prices were set at levels similar to the prevailing market prices and the Ministry of Internal Trade monitors retailers’ compliance to the policy.1

In December 2019, the new government re-established a separate Ministry of Agriculture, Livestock and Fisheries. The new ministry takes over the responsibilities of the former Secretariat of Government of Agro-Industry, which had been part of the Ministry of Production and Labour since September 2018.

The new government introduced a new social programme “Argentina against hunger” in January 2020 (Resolution 8/2020) with the objective of guarantee access to food, with special attention to the most economically and socially vulnerable sectors. The programme provides monthly financial support through an electronic “food card” allowing card holders to buy all categories of food products (excluding alcoholic drinks) up to the value of a basic basket of quality food including dairy, vegetables, meat, and other fresh food. The cards are to be distributed to the parents that are current beneficiaries of the universal allowance for children under 6 years of age (AUH programme), pregnant women from the third month of pregnancy and disabled persons eligible for AUH.

In late 2018, the Congress approved Law 27454 that created the National Plan against Food Waste and Losses (FW&L) in order to continue working with the FAO and other allies on the implementation of this plan that will include the following actions: improvements in infrastructure; implementation of new technologies; and agreements with NGOs, schools and media to reduce FW&L and to increase donations. The new law limits the responsibility of the food donor in order to facilitate donations that could otherwise be wasted, while ensuring conformity with the Argentine Food Code. The government is working with the FAO on the implementation of this plan that includes the following actions: communication campaigns to create awareness across all actors in the food chain.

In July and November 2019, the Ministry of Finance increased the price of sugarcane-based and maize-based ethanol used in fuel blending by 8% and 3%, respectively (Resolutions 119/2019 and 290/2019).

The Ministry of Agriculture, Livestock and Fisheries launched a National Programme to support Good Agronomic Practices (GAPs) in the Fruits and Vegetables sector (Resolution 174/18). These practices became mandatory since their inclusion in the Argentine Food Code by joint Resolution 5/2018 from the State Secretariat of Health and the former Ministry of Agro-industry. The GAPs aim to strengthen the safety of fresh fruit and vegetable foods, as well as the preservation and rational management of soil, water and energy resources, to promote sustainable production systems. The training is mandatory with official certification and periodic update through a virtual course designed by the Ministry together with INTA and SENASA. Resolution 198/19 created the National Programme on Food and Vegetables in October 2019, focussing on the adoption of technological innovations that could improve competiveness, and on systematic data collection related to the application of inputs in order to better plan production in different geographical areas.

A new programme for good agricultural practices in the dairy primary sector was launched in 2019 (Resolution 166/19). It provides technical assistance and capacity building services to producers, promoting the use of certificates and protocols. This is in line with the “Rotterdam Declaration for the contribution of the Dairy sector to the SDGs”, to which Argentina adhered in 2019 (Resolution 105/19). The province of Córdoba approved Law 10.663 on good agricultural practices in 2019, the first legislation in the country defining compulsory general criteria for sustainable production and management of natural resources.

The Ministry of Agriculture, Livestock and Fisheries created a working group on the environmental competitiveness of the agro-food sector (Resolution 122/19). The group has so far proposed an information system for the analysis of the life cycle of food products, a set of agri-environmental indicators to monitor the performance of the sector in this area, and capacity building measures.

Resolutions 36/2019 and 44/2019 created a new regulatory procedure for the evaluation and approval of new GMO events based on a case-by-case assessment by the National Commission of Advice on Agricultural Biotechnology (CONABIA). In 2019, seven new GMO events2 were approved in Argentina for cotton and maize.

Several government initiatives focused on improving the application of agro-chemicals. SENASA Resolution 32/19 establishes a list of active agro-chemical principles according to their legal status: forbidden or usable under certain restrictions. The joint Resolution 1/2018 of the Ministries of Agriculture, Livestock and Fisheries and Environment had launched a public consultation in 2018 on the public policy principles for the application of agro-chemicals, including a comparative analysis of legislation across provinces. Additionally, in 2019 the Ministry of Environment launched an inter-ministerial working group on the use of chemical products. The former Ministry of Agro-industry and the former Ministry of Sustainable Development approved a joint resolution (1/2018) that creates the Inter-ministerial Working Group on Good Practices on Pesticide Applications. The Action Plan on Bio-inputs (Resolution 105/19) involves all actors from the public and private sectors to develop alternatives and complements to chemical products.

SENASA Resolution 67/19 approves the National Plan for the Control and Eradication of Bovine Brucellosis. The plan includes compulsory vaccination in all territories except Tierra de Fuego, Antarctica and the South Atlantic Islands.

On 13 June 2019, the Ministry of Agriculture, Livestock and Fisheries granted ARS 87 million (USD 1.44 million) through the National Fund for the Mitigation of Agricultural Emergencies and Disasters to assist producers in the Chaco province who were affected by severe floods (Resolution 33/19).

Trade policy developments in 2019-20

Two Decrees (280/2019 and 335/2019) modified the temporary emergency measure re-establishing export taxes of up to 12% on all exports of goods and services adopted in September 2018 and expected to expire in December 2020. They provide an export tax allowance to micro, small and medium enterprises for all exports exceeding the FOB value of their exports in the previous calendar year. The allowance only applies if exports did not exceed USD 50 million in the previous year and to a maximum of USD 0.6 million (USD 0.3 million if the firm did not export in the previous year).

The Decree 37/2019 eliminates the ceiling on the export tax of ARS 4 per USD for primary agricultural goods, which de facto raises the export tax to 30% for soya products and 12% for other products. In addition, Law 27.541 (article 52) authorises the government to modify the export tax of these commodities to a maximum of 33% and 15%, respectively. On 5 March 2020, Argentina (Decree 230/2020) increased export taxes for soybean and soybean products from 30% to 33%. Export taxes were lowered from 9% to 5% for maize flour and from 9% to 7% for wheat flour, while export taxes for maize and wheat were kept constant at 12%.

In May 2019, the Ministry of Treasury in Argentina exempted imports of soybeans that are crushed for re-export in the form of meal/oil from the generic import tax.3 The exemption was granted to support the local crushing industry and facilitate the country’s exports of soymeal/oil.

In June 2019 the European Union and Mercosur reached a free trade agreement involving EU Member States and the members of Mercosur (Argentina, Brazil, Paraguay and Uruguay) (Baltensperger and Dadush, 2019[1]). On industrial goods, the agreement removes all tariffs on EU imports from Mercosur and on 90% of imports by Mercosur from EU Member States. On agricultural goods, the agreement removes tariffs on 82% of EU imports from Mercosur (including many fruits, juice, wine, coffee and fish products), and on 93% of Mercosur imports from the European Union (including olive oil, wine and chocolate),4 all with a transition period of up to 10 years after entering into force. Market access to the EU common market from Mercosur member countries is to be further improved through the expansion of the EU tariff rate quotas (TRQs) for sensitive products such as beef, poultry, pork, sugar, ethanol and cheese. The agreement also foresees facilitating trade with streamlined border and sanitary and phytosanitary (SPS) procedures, mutual recognition of Geographical Indications (GIs), and a chapter on trade and sustainable development. The agreement is still undergoing technical revision and translation, and remains to be approved by the European Union and Member States as well as by Mercosur countries.

References

[1] Baltensperger, M. and U. Dadush (2019), “The European Union-Mercosur Free Trade Agreement: Prospects and risks”, Policy Contribution, Bruegel 11, https://www.bruegel.org/wp-content/uploads/2019/09/PC-11_2019.pdf.

Notes

← 1.  AMIS Market Monitor No 68, May 2019.

← 2.  A GM event is defined by the insertion of DNA into the plant genome as a result of a single transformation process. Each event needs to be approved by the authorities before its commercial use.

← 3.  AMIS Market Monitor No 69, June 2019.

← 4.  Mercosur-EU Strategic Association Agreement, informative summary prepared by the Argentine Government (July 2019), https://www.cancilleria.gob.ar/userfiles/prensa/resumen_acuerdo_mcs-ue_elaborado_por_gobierno_argentino.pdf.