The agricultural sector welcomed President Javier Milei's announcement regarding the reduction in withholding taxes on crops, beef, and poultry, but above all, that it be permanent.

As the President explained, the objective of the measure is to" boost the countryside", something that was agreed upon by the sector since it is the moment that producers begin to make sowing decisions for the soybean and corn campaign, the two main crops planted in the country.

Among the announced changes, there will be a 20% reduction in grains: corn and sorghum will drop from 12% to 9.5%, and sunflower from 7.5% to 5%. In the case of soybeans, one of the most taxed crops, the 33% withholding will be reduced to 26%, while by-products will go from 31% to 24.5%. In addition, it was confirmed that both wheat and barley will maintain the 9.5% rate in effect until March 31, which will be established as permanent.

Javier Milei at the Opening Ceremony of the 137th Rural Exposition. Cristina Sille/Clarín FTP CLARIN CIS_8049.jpg Z Guest

While export duties on beef and poultry will be reduced, from 6.75% to 5%. The fiscal cost of the measure for the Government will be US$700 million, according to official calculations given to Clarín Rural

The crop hardest hit by export taxes is soybeans. Given the recent deflated prices and no clear signs of a short-term recovery, and with the 33% rate, producers were seeing negative results, meaning they were losing money from planting.

According to the latest report from AACREA, one of the technical bodies representing leading producers, 80% of Argentina's soybean acreage was unprofitable. According to the latest survey published this Friday, an estimated 2 million fewer hectares of soybean crops were planted for the next campaign, which begins in October.

Karina Milei, Javier Milei, and Luis Caputo. EFE/Juan Ignacio Roncoroni

"More areas are becoming more profitable. Depending on the likely yields, they would be profitable or neutral," said Rodolfo Rossi, president of the Soybean Chain (Acsoja)."The entire north of the country and the south of the province of Buenos Aires," he specified, specifying which areas are primarily helped by the lower rates.

" It decompresses a little, the area remains away from the very complicated ports, but it is a 20 percent drop at a time when all sectors are asking for the same thing and the fiscal surplus is not enough to lower taxes for everyone," remarked Federico Zerboni, head of the Corn and Sorghum Chain (Maizar).

"It frees up resources to invest in new technologies and improve productivity. This, in turn, boosts value-added, strengthens exports, and stimulates regional economies with a powerful multiplier effect," he said.

"It's a step in the right direction. The announcement about the rate reduction is good, and it's better that it be permanent," emphasized Fernando de Nevares, head of Aacrea."A bill with a progressive reduction would be ideal, preventing them from being implemented again in the future, by executive decree, in this or future administrations," he added to his analysis.

It's worth remembering that foreign currency settlement, according to CIARA-CEC estimates, exceeded US$15.4 billion between January and June, the time the temporary reduction in withholding taxes took effect. This increase marked a 39.9% increase compared to the same period in 2024, a record that placed foreign currency settlement at its highest in recent years. Some 22 million tons of soybeans and 7 million tons of corn remain in the hands of producers.

The meat industry was left with a bittersweet taste, as they had hoped for the tax rate to be completely eliminated. Currently, beef destined for China is free of withholdings. According to various calculations, lowering this tax to zero would have a fiscal cost of $100 million.

In any case, they celebrated the rate reduction."It's positive that the reductions are definitive. We're on the right track. Hopefully, we'll soon be talking about total elimination," said Daniel Urcía, president of the Argentine Federation of Regional Refrigeration Industries (FIFRA).

For his part, the head of the Argentine Feedlot Chamber (CAF), Fernando Storni, said that"the important thing is that we continue on a path towards zero withholdings on all products." The impact of the exchange rate difference in recent months is greater than the impact of this 1.75 point reduction. But it is one more step," added the head of the chamber that represents 70% of the national slaughter.