2024-02-03 18:59:21
With the first month of the year already in the pocket, 2024 is projected to be full of conflicts on multiple fronts in the relationship between agriculture and the government: the official exchange rate, current climatic conditions under the presence of El Niño, prices soybean and corn international trade, the performance of Javier Milei’s government, the impact of Luis Caputo’s financial and economic plan, the implementation of the omnibus law and, most importantly, the tolerance of the salaried citizen.
To begin with, talking regarding the official exchange rate reflects a monetary and economic policy very similar to that carried out by the former Minister of Economy Sergio Massa. With the aggravating factor of the step on the interest rate offered by the market in general and the financial market in particular, and the crawling-peg, which barely anticipates the readjustment to the 2 percent monthly rise in the exchange rate.
We are living the “Plan Cosecha” which is not far from the previous “Plan Platita” or “Plan Soja”. Before, with Massa, high interest rates and Leliqs were used and now with Caputo they intend to use Bopreal (in its different versions) by stepping on the rates. Same formula, different variables.
With these differences, the Government aims to contain inflation and prepare us for eventual dollarization. But the Government still does not know how to address paid liabilities. We are just watching the first episode of the first season.
By stepping on the interest rate, Caputo intends to avoid the multiplication of pesos that occurred with Massa. The underlying risk is upward pressure on financial dollars. To curb this upward pressure, setting the crawling-peg at two percent aims to send a short-term signal to the market that the official dollar will not move. However, we must not lose sight of the gap between the official and the financial, MEP and cash with settlement.
In Creole: sand aims to open up the economy with an empty wallet, lack of private investment and shortage of labor supply. In this scenario, it is very difficult for Milei’s government to fulfill its most famous electoral promise: dollarize.
Don’t let the hyper wake up. The “Harvest Plan” is a small step towards that final goal but the truth is that it still needs several more steps. First, honesty of relative prices, then trying to control inflation, then accumulating reserves for payment compliance, at the same time attracting dollars with money laundering. In addition, the Government must control the gap so that the producer has incentives to sell their harvest and reduce State expenses. All the mechanisms are playing today so that the hyper does not wake up and lose control of the boat.
In this context, in agriculture, good yields are expected for the thick harvest following three years of drought punishment. 2023 was the worst in the last four decades. But we must take into account an old and well-known problem: the producer sells at the official dollar value minus withholdings and the State then prints bills to pay the producer.
By stepping on the official dollar and retaining it, the Government is left with the difference once more. Nothing more distorting. Milei knows this and says that she is once morest it, but she has no alternative. If he does not do so, the “Harvest Plan” will fail.
In short, there is direct issuance – and also indirect with bonds in all their flavors – and the coffers will increase. The mechanism continues to impoverish the producer.
In this scenario, “El Niño” is doing his thing. It took regarding 50 days from when the temperature of the Pacific Ocean was above average until our productive areas received the typical widespread and abundant rains, characteristic of this phenomenon.
The producer waited to sow with water in the profile and important hours of sun were lost. As January ends and February enters, the crops are suffering from the heat wave of recent days and the desires for a record harvest are fading.
In any case, there is no perfect year for agriculture. A good harvest is expected, but unfortunately we have falling international prices.
On the other hand, the rumors of “La Niña” on the horizon are intended to scare international operators so that future prices, of soybeans in particular, do not collapse.
The current scenario indicates that the financial market is fully regulated, diesel is released and the agri-food chain is tied with wire (official dollar controlled, prices on shelves flying through the air).
The Government needs to implement the omnibus law as soon as possible to patch up this mess and prevent the crisis from translating into a social climate marked by hopelessness, although we are close.
Meanwhile, the producer continues to pay the price: The State parasitizes resources originating from agriculture, concentrating them in the “city” and then distributing them at its discretion and trying to contain productive inefficiency following 40 years of socialism. The field also has a limit.
We are in a race once morest the clock. We have oil and gas, lithium and minerals, land and agro-industrial technology and a great work capacity. Time is what we lack.
Director of the Master’s Degree in Agribusiness at the Blas Pascal University.
1706988660
#emergencies #Mileis #Harvest #Plan
