From Schiaretti to Cornejo, the criticism of the opposition and dissident Peronism of the “war on inflation” and the increase in withholding

The content of the announcement on the “war on inflation” made by Alberto Fernández without too many specifications on the measures that he will begin to outline from next week; and the officialization of the increase in retentions and biodiesel in the Today's Official Gazette, aroused strong criticism, both in the opposition of Juntos for Change, and in the voice of one of the most important referents of dissident Peronism, the Cordovan governor Juan Schiaretti (PJ), who stood up to battle against the consequences it will have for the sector the battery of initiatives proposed by the national government.

Yesterday, after it became known that inflation in February reached 4.7% and food prices rose by 7.5 per cent, Alberto Fernández announced the creation of a fund to subsidize wheat flour, after the price of bread skyrocketed, on Friday night. And today the Government formalized the increase in export duties by 2 points on soybean meal and oil. According to the resolution of Decree 131/2022, the rate of retention of soybean meal and soybean oil will rise from 31% to 33% until the last day of this year.

Schiaretti was one of the first to oppose, without question or euphemism: “I reiterate my rejection of the increased retention of soybean meal and oil, mandated by the National Government. It's another hand stuck in the pockets of the people of Córdoba. It is a tax on production that does not exist anywhere in the world,” said the governor of Córdoba, who has a certain dialogue with Casa Rosada but remains in a critical way, especially when it comes to measures aimed at cutting income to the countryside. The provincial chief thus ratified the claim “from Córdoba” that “export withholdings must be phased out until they reach zero, and they must account for the tax on producers' profits while their elimination takes place.”

From the opposition, Together for Change, which usually has differences - as happened in the face of the agreement with the IMF, this time it came out in a unified way to fire from the different forces that make up the opposition coalition. From the Civic Coalition, radicalism, and Pro, unanimously questioned the speech that Alberto Fernández gave yesterday since the fifth of Olivos on the beginning of the crusade that he had advanced four days earlier in Tortuguitas, which was made official today, also, with the creation, via the Ministry of Productive Development, which leads Matías Kulfas, of the “Argentine Wheat Stabilization Fund”, which reportedly aims to “stabilize the cost of the ton of wheat purchased by Argentine mills”.

The economist and the national deputy for Together for Change, Martín Tetaz, said via Twitter that inflation is deliberately generated by the government. He argued that the President “did not announce anything about monetary or exchange rate policy.” And he told the national administration: “Inflation is caused by you. By the way.”

The Speaker for the Presidency, Gabriela Cerruti, crossed it with a question to the previous government: “I was going to answer seriously. But the 'on purpose' part doesn't allow me to. Ask Mauricio Macri, who solves inflation and debt in a minute and left us the country with 54% inflation and 45 billion dollars of debt. By the way?” , he wondered.

“There is no plan,” said, in turn, through the same social network, the national deputy of the CC, Maximiliano Ferraro. “Not a concrete measure against inflation and uncontrolled monetary issuance. One only insists on a failed recipe: more controls and restrictions. That he understands once and for all, he has to order macroeconomics. Sarasa,” he added, with an ironic reference to the controversial neologism used last year by Economy Minister Martín Guzmán during an official public speech.

Meanwhile, the bloc of national deputies of the UCR noted that “the increase in export duties by decree is null and void”. In a statement, they highlighted that the Executive “does not have constitutional powers to raise export duties, given that the Economic Emergency Law of 2019 and the powers delegated by Congress expired on December 31, 2021.” And they explained that the two-point increase in export duties - from 31 to 33% - on flour and soybean oil announced today must “necessarily” pass through the National Congress. “The suspension of a benefit from a 2020 decree cannot be argued because the delegated faculty of Congress that existed then is no longer in force,” they said.

And they pointed out that the measures taken by the Government are “old, untimely and with a lack of legality”. “You don't have the powers, you can't issue a decree on tax matters. This is void of absolute nullity”, they insisted. The head of the JXC Senators block, Alfredo Cornejo, stated in the same vein: “The increase in withholding is not temporary, they are illegal. Discourse cannot bypass institutions. The government must, even if it does not want to resort, to Congress and, in turn, take charge of the measures it takes,” he said.

Meanwhile, the president of Pro, and head of the party's block in Deputies, Cristian Ritondo, came out strong with an open letter entitled “It is easy to govern by destroying the value of all Argentines”, where they broke down the measures and questioned them one by one. On the decoupling of international prices from domestic ones, they said that “since this government took office it has decoupled domestic prices from international ones through export duties, exchange rate differentials and export quotas, however, they were unable to stop inflation.”

And they asked: “Why is inflation of our neighbors, food producers, in single digits, when they have the price of grains at international values and not less than half as much as in Argentina?” They also pointed out that “the president's announcements need to include a war on political spending and privileges.”

Meanwhile, Juntos por el Cambio in the Buenos Aires Chamber of Deputies presented a draft declaration repudiating the increase in withholdings, where they considered that “they harm the agro-industrial sector, generating a clear fall in the country's only genuine source of foreign exchange.” “We see how the current National Government makes a false diagnosis to the problems, and then apply the wrong remedies. So they are once again announcing an increase in export duties that affects the entire agro-industrial chain as a whole,” they said in the project signed by Deputy Luciano Bugallo. And they stressed “the impudence of the official lie”, since “just a few days the Minister of Agriculture of the Nation, Julián Domínguez, announced that “there would be no increase in withholding cereals or closing exports.”

The measures also provoked criticism from the productive sector, where they specified that the price of wheat in the final value of bread continues to have a low incidence, ranging from 10% to 15%. According to the latest statistics from the Agricultural Foundation for the Development of Argentina (FADA), wheat represents 12.9% of the final value of bread, the mill 5.2%, the bakery 60.4% and taxes 21.5%. On the other hand, this price is composed of 67% of costs, 21.5% taxes and 11.5% profits. In addition, the price of wheat is multiplied by 7 from the field until the bread reaches the gondola.

To all this, the Government argues that the increase in withholdings on soy by-products will not cause harm to producers, but grain market analysts argue otherwise. They argue that the export industry, having less capacity to pay due to the increase in tax pressure, will transfer this to paying a lower price to the primary sector for grains.

After Alberto Fernández's speech on the new economic measures, after Congress approved the Agreement with the International Monetary Fund (IMF), the president of the Argentine Rural Society (SRA), Nicolás Pino, said that “the war that the President of the Nation claims to have launched against inflation is more like a battle against production”.

From the Liaison Table, the head of Coninagro, Carlos Iannizzotto, who said about the presidential speech: “I hope that the 'war' against inflation will be with adequate measures. We continue from the productive sector to propose policies in favor of work and employment.”

This morning, the Minister of Agriculture, Julián Domínguez, came out to defend the measure, at a press conference where he said that the increases until December 31 aim to “take care of consumers and that Argentine producers are not harmed”, to what he defined as “the goose that lays golden eggs”. In addition, he assured that the measures “are temporary” and added that, “the president has decided to create the Temporary Stabilizing Fund for Argentine Wheat, whose implementation and administration will be carried out by the Ministry of Internal Trade, which will constitute a trust fund in this regard.”

But he did not respond, when asked, to collect the impact that the fund could have on the price of bread. He pointed out that the responsibility of his portfolio is the price of wheat and referred the question of the price of bread to the competition of Internal Trade, led by Roberto Feletti, one of the members of hard Kirchnerism who has been pushing price controls that did not yield results. On Monday, it will be Matías Kulfas' turn to defend the questioned measures, on which the Government plans to resume the economic initiative after the agreement with the IMF.

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