Yesterday afternoon Economy Minister Sergio Massa announced a new “agro dollar” exchange rate, which aims to boost agricultural exports and strengthen international reserve accumulation.
Governors from several provinces supported the policy, arguing that it would help employment and boost the competitiveness of producers in their regions. Entre Ríos governor Gustavo Bordet said it would also “give some predictability to production that was heavily affected by the drought”.
Juan Manzur, governor of Tucumán, said the measures would “strengthen” local economies. “The new exchange rate will allow producers to have more income and open to new markets,” said the Chubut governor Mariano Arcioni.
Producer chambers also expressed their support. The Argentine Oil Industry Chamber (CIARA) said in a statement that “the measure is a favorable step towards production and exports, as well as an acknowledgment of the need to have a competitive and single exchange rate”. According to their analyses, “the seven-week agro dollar will report an income estimated at US$5 billion dollars”.
The Argentina Wine Corporation (COVIAR) also supported the announcement and stated through a release that “all wine producers benefited from the differential exchange rate”.
Additionally, the Citrus Exporters from the Northeast of Argentina (CECNEA) tweeted to express their “satisfaction” with the announcement.
However, the measure was criticized by agricultural organizations in the Liaison Board, which released a statement saying that the policy is a “drought of ideas that expels the producers”.
For a limited time, agricultural producers can export soybeans, other soy products, and regional agricultural produce at a beneficial exchange rate of AR$300 to the dollar. The official exchange rate is currently AR$214 to the dollar.
Massa also announced a decree establishing a sanction model for the businesses that don’t comply with the 180-day deadline set by law to liquidate their export income in pesos in Argentina.
“The criminal law is not enough for those who speculate [with prices],” he said during the announcement. The sanctions will include a suspension of their permits to do business if they fail to liquidate before a deadline that will be set in the executive order.
“We hope it will empower the export sector and our currency, as well as our reserves in such an uncertain time at a global and local level,” Massa said.