June 13, 2024

Brighton Journal

Complete News World

Argentina is an example of agricultural poverty

Argentina is an example of agricultural poverty
In Brazil, they fear that the government will impose illegal taxes on the countryside, as is happening in our country (Sagra magazine).

Although the numbers cooled in the later rounds, Chicago celebrated the news from Brazil with a strong surge last Thursday. Lula’s government tightened the rules for using tax incentives Contribution to the Financing of Social Integration (PIS) and Social Protection (Cofins). so, Costs change and someone within the chain has to pay. They speak of a situation of uncertainty in agriculture and agribusiness That leaves the trade in the dark to determine how much soy and its derivatives are worth. That’s why they went out of business early on, and so did the producers.

Generally, when companies pay PIS/Cofins on purchase of inputs Then they can recover that amount from discounts on other rights. Now this mechanism will be controlled; They will have to use their own money to honor previously avoided taxes, which will be passed up the chain.

Provisional measure (MP) 1,227/2024 of the Brazilian government provides that these credits can only be compensated under a non-cumulative system, without interaction with other taxes (“crosses”), except for credits from the tax. This rule came into effect immediately, but not yetIt requires congressional approval within four months to be valid.

Soybean price cut for Brazilian producer (Sagra Magazine)

For agribusiness, this activity costs USD 1,800 million per year (R$ 10 billion per year).. This figure includes an estimated USD 1,170 million (R$ 6.5 billion) impact on PIS/Cofins accumulated in the oilseeds industry and exports of soybeans and derivatives, with USD 450 million (R$ 2.5 billion) in compensation received by the meat sector. , USD 83.7 million (R$ 465 million) related to coffee exports and approximately USD 72 million (R$ 400 million) through the orange juice export sector.

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The reaction was immediate. Everyone associated with the countryside and its industries clenched their fistsBecause, if adopted by parliament, the official resolution would seriously affect the competitiveness of Brazil’s soy and corn chains. From there There was widespread euphoria in the U.S. market last week before investors said the move would boost the millage of coarse grains produced in the country of the Stars and Stripes..

Americans’ excitement gave way to caution the following Friday, when they realized it The MP is more likely to be rejected by the Congress, which is strongly influenced by agrarian interests. The Rural Caucus is the most powerful political expression of all political expression in the Brazilian Parliament.

anyway, The upheaval across the chain represents the latest test of President Luiz Inácio Lula da Silva’s tenuous relationship with the agricultural sector., and opens the door to future conflicts. The first to shout to the sky were the oil workers. From Abio, the Brazilian vegetable oil industry association, they confirm that the move will make them less competitive and penalize soybean producers. and jeopardizing their investment plans. “It destroys value across the chain, creating a new cost and The price offered to soybean producers should be reduced by 4-5%. “It’s disrespectful to one of the biggest industries in this country.”

This move by the Brazilian government is thought to reduce the competitiveness of the entire soybean chain (Sagra Magazine).

Industry insiders say the official decision comes as a shock and a surprise Affects company results overnight, they are unable to predict the economic and financial impacts on their operations. Of course, this discourages investments in the industrialization of oilseeds.

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Because soybean processors and biofuel producers essentially have higher tax costs and lower margins.The big winners are expected to be their counterparts in Argentina and the United States.The extent of that change is not yet clear.”

ANEC and ANEA, which represent grain and cotton exporters, described the move as “a serious institutional setback”.. Both asked Congress to immediately reject it or open a broader debate with companies to discuss its impact. The former represented 74% of Brazil’s exports of corn and soybeans, while the latter made Brazil the world market leader in cotton exports.

The US and Argentina could take advantage of the loss of competitiveness of Brazilian soybeans, if the measure is approved (Sagra Magazine)

For its part, The powerful Brazilian Agriculture and Livestock Confederation (CNA) also asked the National Congress to reject the MP’s speech in its entirety, describing it as unconstitutional.. According to its Vice President Jose Mario Schreiner, all agricultural products will be affected by the PIS/Cofins limit. “Presumably the producer is the one who pays the bill” The manager insisted.

But still Unconfused is Abrosoja Brazil, an organization representing the nation’s soybean producers. “Actions such as the Argentine freezes that destroyed the agricultural chain in recent decades and created exchange instability and uncontrollable inflation as a result of these kinds of distorted policies are unfolding.”. This is logical, the prospect of escalation by this type of activity in Brazil is alarming.

And legislators? Federal Deputy Pedro Lupián (PP-PR), warned that The restriction of PIS/Cofins credits is an “irresponsible action” by the government. “He changed the rules of the game as the game went on. This restriction will reduce the price of soybeans received by the producer by about USD 13 per ton, and will also affect farm prices.“, he asserted. After all, it would take a miracle for Lula to survive this unpopular move.

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