It was July 2016, the day had dawned cold and rainy, another gray day in that winter that seemed to drag on indefinitely.
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Agronomist Nicolás Venancio Álvarez Calderón sat thoughtfully in his office. At the beginning of the year, he had been invited by the new government, elected in December 2015, to serve as Minister of Agroindustry. Naturally, when he received the offer, he gladly accepted. He felt very honored and also recognized.
the community and political work that he had been developing for some years.
Originally from a family with a farming tradition in the province of Santa Fe,
Nicolás had dedicated his life to agriculture. Besides farming on the family's properties, he leased land in the Perdices area of ​​Entre Ríos province and was highly respected for his technical expertise and his warm personality. His perspective on the agricultural and industrial sector had always been from the private sector, and he was involved in employers' associations. Now, in the public sector, he saw the situation from a different perspective.
perspective and this worried him.
The previous government had not had good relations with the sector.
The agricultural sector, among other reasons, was criticized for maintaining export taxes on grains (wheat, corn, and soybeans) for 13 years. He had witnessed firsthand the tension between the public and private sectors in 2008, when the government attempted to change the export tax system by making them variable and increasing them based on rising prices.
international prices.
He remembered the road blockades and the demands of the sector, which, in the end, succeeded
that the measure proposed by the government not be implemented. During the political campaign prior to the 2015 presidential elections, the opposition party PRO formed the PensAr Foundation. Its objective was to organize working groups to address crucial issues of change that should be implemented. Nicolás had actively participated in the group dedicated to agribusiness, and on August 8, 2014, a
document entitled Agro-industrial Policy Proposal (see ANNEX 1).
On August 25, 2015, the candidate of the opposition party PRO, who turned out to be the
The president-elect reaffirmed his campaign promise to eliminate withholding taxes for everyone.
crops, except for soybeans, which would decrease by 5% per year.
That Monday, Nicolás had just left a Cabinet meeting with the President. He stood up from his desk, lost in thought, and went to the window. He could see his reflection, and although he was 42, that day he looked much older. The pressure was coming from all sides. When the new government took office in 2015, it immediately fulfilled its campaign promise and reduced the soybean export tax from 35% to 30% (Decree 133/2015).
Soybean producers belonging to the Argentine Soybean Chain Association (ACSOJA) wanted more; they were requesting another 5% reduction for the 2016-2017 season. Soybean planting for the 2016-2017 season takes place in the spring, but the producers were pressing for advance notice regarding the reduction in export taxes so they could decide how much land to plant and purchase seeds, one of the most expensive inputs, in order to achieve profitability. Nicolás had met with them the previous week, and a tense discussion ensued. From the other side of the table, he confessed to the producers that fiscal needs left no room for a further cut: “They will remain at 30%,” he told them, adding: “There are delicate situations, and the decision doesn't rest solely with me. We are part of an economic cabinet, and we will express our position, but I understand that some situations have changed from what was budgeted, such as the tariffs, and we all have to adapt to reality. We will meet next week with the President and the Minister of Treasury and Public Finance to move forward in this direction, but it is not a topic we are currently discussing in the Cabinet.”
Nicolás faced a dilemma: maintain the export taxes, even breaking a campaign promise, or eliminate them. The argument he heard from Cabinet officials who opposed eliminating them was that the agricultural sector's profitability was very good, particularly for soybeans, given that international prices in June had risen 23% compared to the average prices of the first quarter of 2016 and were trading at around US$400 per ton on the Chicago market. They also pointed out that, with the 5% reduction in December of the previous year, the sector received an additional US$1.200 billion in revenue and believed that this was not the time for another tax sacrifice.
For their part, the soybean producers, represented by the president and vice president of ACSOJa, had assured him that due to excessive rains in the previous season there was a lot of rejection of grains with high moisture content and that in productive areas such as the province of Santa Fe, repairing the climatic damage will involve an approximate expense of $45.000 billion (see ANNEX 2).
The President was clear that morning. He gave Nicolás the autonomy to make the decision regarding export taxes, justify it, and communicate it to the private sector. A few weeks earlier, Nicolás had contacted Jan Niegrzeczny, a public policy specialist in the agribusiness sector, and asked him to prepare a report with recommendations. That afternoon, he would meet with the advisor to analyze his proposal and decide whether to follow it or develop an alternative. Nicolás needed to prepare. Where to begin?
At that moment, Nicolás remembered his former professor at the Faculty of Agronomy, Felipe Villanueva, whom he admired for his professionalism and fairness in analyzing the complex web of the agricultural-industrial production chain in Argentina. With warmth, affability, and sometimes a touch of subtle irony, the professor taught his Agribusiness Chains classes and allowed students to record them. Fortunately, Nicolás had kept the transcripts. He quickly got up from his chair, asked his secretary for a coffee, and began reviewing the lessons of his admired professor.