October 20, 2014
In the wheat of things
Economy Minister Axel Kicillof’s announcement on Monday that the national government plans to allow the “gradual” export of wheat this year might sound like a technical issue that only concerns the owners of big farms, but the average consumer needs only to consider the exorbitant price of a kilo of bread to realize that this matter affects us all. The year 2013 was a terrible one for the wheat industry with shortages due to a bad harvest forcing up the price of bread while shutting down exports. Now Kicillof is saying that Argentina is looking at a better harvest in 2014, 9.2 million tons — more than enough to cover the internal demand of six million tons and allowing for the export of 1.5 million tons. Yet Kicillof, even when the Fernández de Kirchner administration is starving for every export dollar it can get its hands on, is only allowing for an initial 0.5 million tons of wheat to be sold abroad, citing concerns about internal prices. Somebody should tell the economy minister that the price of bread is already a delicate political issue and that his statements about wheat exports being regulated to protect consumers will ring hollow if inflation continues to be a problem. Kicillof also made a point of stating that the decision to release exports gradually had the agreement of the farmers. But the Liaison Board of farm lobbies rapidly issued a statement criticizing the decision.
It should escape no one that ultimately there is a political side to the story because the national government’s announcement came after Liaison Board leaders met on Saturday with Sergio Massa, the rebel centre-right Peronist who won the mid-term elections in Buenos Aires province and is expected to eventually make a presidential run in 2015. The point of Saturday’s meeting was to back a motion to abolish wheat export duties. Kicillof on Monday got the message because he asked the opposition to explain what would happen to the price of bread if the current 23-percent duty on wheat exports is abolished. The minister could have a point, but even with the export duties and the regulations, the current price of bread is not cheap. The Liaison Board meanwhile is playing its own political game by flirting with Massa, while at the same time sending its team of experts for negotiations at the Argiculture Ministry.
Monday’s announcement thus seems to be the product of another round of pathetic political posturing by all those involved.