July 8, 2008

Dealing a setback to farmers hoping for an amendment to a controversial soy export tax, Argentina's Senate appears set to pass the scheme after the House voted to endorse the taxes Saturday (July 5, 2007).

The head of the majority block, Miguel Angel Pichetto, told Radio America that he is confident the law will pass.

The government is very close to securing the 37 votes needed to form a quorum in the Senate and approve the bill, according to local press reports.

A vote is expected late this week or early next week.

Meanwhile, farm groups redoubled efforts to convince Senators to vote down the taxes.

Argentine Agrarian Federation leader Alfredo de Angeli is upbeat despite the setback, telling reporters that farmers have only lost the first battle.

Farmers are angry that the House bill included a clause which will potentially end a package of subsidies and tax exemptions offered to small-scale farmers at the end of October. Under the bill, President Cristina Fernandez will have discretion to renew or cancel the benefits at that date.

The President increased the amount of small farmers exempt from the tax to boost support in the House, which gave her the vote for the soy export tax.

Argentine Rural Confederation President Luciano Miguens, speaking to Radio Mitre, expressed disbelief that the authorities would have the power to change the rules a month after planting starts.

The bulk of corn and soy planting in Argentina generally starts in September and October.