Soy Production In Argentina 'Not Viable'

Argentine "Soy King" Gustavo Grobocopatel, the second largest arable farmer in Argentina after George Soros, said over the weekend in Buenos Aires "If soy export taxes remain at 35% and commodities don’t recover the prices of the early part of 2008, next year many people will be going bankrupt because with current costs oilseed production is not viable."

"As the income costs equation is currently structured, all farm production in Argentina becomes non viable," he added.

Grobocopatel said that farmers are in a strait-jacket of sliding export taxes and warned that current levels make it impossible to farm at a profit.

The government of Argentina on Tuesday, denied rumours suggesting they were going to lower the export duties of soy. Farm leader Eduardo Buzzi, said that a 5% cut of the soy tax is essential and that Argentine farmers "were are worse off than in the 90’s."

With the governments' wheat revenue looking badly hit in 2009, it doesn't seem very likely that a tax reduction will be on the cards for soy this year. They'd probably like to raise tariffs to balance the books, but we all know what happened last time they tried that!