Argentina’s agribusiness plan casts doubt on climate goals

Argentina aims to significantly increase production and exports of agricultural products over the next decade, according to a new plan providing incentives for the agribusiness sector.

On November 11, the Argentinian executive branch submitted a draft to the lower house consisting of its plan to promote “federal, inclusive, sustainable, and exporting agro-industrial development,” foreseeing a set of benefits for agricultural, agro-industrial, and forestry investments in Argentina for the next 10 years.

The plan, which will be debated in Congress, was created as a result of an agreement between President Alberto Fernández’s government and major agribusiness leaders. Industry estimates claim that the measures and investments will give a USD 7 billion boost to exports and create 150,000 jobs. However, environmentalists have expressed concern about the impact it would have on Argentina’s emissions reduction targets.

New incentives for Argentina’s agribusiness

To achieve its economic objectives, the plan proposes a set of benefits, including accelerated return on agribusiness investments by allowing higher tax deductions in the first years; advance VAT rebates, and deferred income tax payments for cattle breeding.

According to the agricultural sector, these incentives and benefits will promote investment in better inputs and technologies, which will then allow agricultural and livestock production to increase.

The project is the result of an agreement between the government and the Argentinian Agroindustrial Council (CAA), a coalition of more than 60 institutions which aims to “consolidate Argentina as a leader in the international trade of animal and vegetable foods, in animal feed, and as an exporter of agri-food ecosystem technologies.”

The initiative also has the support of the main opposition parties and, if approved, it is expected to provide a framework of stability to the sector, benefitting small, medium, and large companies and producers throughout the country. Agriculture is responsible for USD 7 out of every USD 10 that enters the country by way of exports.

Crops make up two-thirds of Argentina’s total agricultural production, with around 100 million tons a year destined for foreign trade — largely soy, maize, wheat, and sunflower seeds — while meat and dairy farming make up the remaining third. In the first six months of 2021, the sector’s share of the nation’s total exports reached 67 percent and represented...