Stop deduction of retentions is suicidal

with numbers in hand.

It is proposed to stop the retention of soy, but in truth, no one knows what prices will be processed in the future, what are the costs of the field and what could happen if this taxation persists.

In this work, we will take As a result of the suspension of withholding tax from September 2018, with these resources, the government should comply with the fiscal target set at the IMF. As a result, deductions that were 30% in December 2017, with a reduction of 0.5%, would remain at 26% after 8 months of decline.

Soybean listing until May 2019 The harvest date for the 2018/19 season (expected to be sown between October and November) is US $ 278.50 on the Matba futures market. If we stop the withholding tax, the price would be US $ 241, which corresponds to the May 2019 soybean quotation in Chicago (US $ 325.74) and the deduction of the new aliquot (26%), if we add an additional price, we could say that the price could be $ 250 per tonne. This would imply a decrease for the producer of 28.50 USS or a decrease of 10%.

Let's move on to the cost structure.

As can be seen in the attached table, if to stop the reduction of retentions, in the areas of the central zone, the producer would lose $ 51 per hectare. In other regions, losses would be much higher since yields are much lower.

If we continue with the low interest rate deductions method, the producer would earn US $ 8.00 per hectare and the tax should be the profits, which would bring this profitability back to $ 5.20.

In Argentina, 55 million tons are produced under normal conditions, with this reality, production would drop considerably. However, if only 10% fell, the same thing would be perceived as if the deductions were not reduced. In addition, much less would be collected, because if 10% less are transported and fewer inputs are marketed that have taxes that fatten the general collection.

In summary, the stop of the deduction is suicidal, because: 19659002] Much less would be produced and less would be collected. This is proven, because it has already happened with wheat and wheat under the government of Cristina Fernandez de Kirchner

Less money would come to Argentina.

No one would plant to lose money. The calculations were made in the central zone where yields are highest, in the rest of the country where the yield is less than 3 tonnes per hectare, the soybean plantation would be much less viable.

70% of the Argentinean field it is worked by tenants, with whom the badumption that many think and who would say that the owner is making money, is not likely to occur.

The owner's result does not include property taxes and road taxes, let alone the 35% profit rate. This result compared to the investment made is ridiculous.

It is puzzling that in a country with surplus land, taxes are generated that discourage production. Incentives should be generated to produce more than 55 million tonnes, not the reverse.

If there is an excessive tax on soybeans, many growers will grow another crop without retention, as may be the case for corn. With which collection would be lost.

We have heard a lot of proposals not to lower the deductions, in no case have cost studies been discussed. We put these costs and returns in debate, to exchange opinions and to enrich comments.

The high exchange rate does not improve the profitability of the sector, since many costs are dollarized and others increase in dollars, as is the case with freight, fuel and fuel. other inputs used to plant. The rent is a fixed sum of production, therefore, the rise in the exchange rate has no impact.

We appreciate the possibility of launching a debate with a spreadsheet, continue to preach with the verbalization of the measures without measuring the costs it recalls the past government, where by the empire of the needs of the State, the Agriculture, livestock and dairy farming have decreased its production level several years, have contributed less funds than possible, and widespread a breakdown in the Argentine industrial agricultural sector, and if you do not Do not believe, look at the bankruptcies and the calls of the last years. We advocate the improvement of productivity, a word that seems forbidden in the political clbad, we await your comments.

* Economic and Financial Analyst