Sunday, August 14

Meat: Government evaluates new measures and summons the value chain

The solution, they consider within the Government, is transversal to the ministries of Agriculture, headed by Julián Domínguez, and of Productive Development, where Matías Kulfas is located, and from which the Ministry of Internal Trade, with Roberto Feletti, emerges. They consider that, with the meeting last Thursday at the Palacio de Hacienda, an inter-ministerial cabinet was formed on the facts that will take up the issue, made up of Domínguez, Kulfas, Feletti, and the Minister of Economy, Martín Guzmán.

At that meeting there were coincidences regarding the “concern” about the recent rises, and they agreed to seek a solution. The first was to freeze meat prices in supermarkets for the long weekend, and then proceed in dialogue with the sector. This Wednesday there is a meeting in the Ministry of Internal Trade with supermarkets, meatpacks, butchers and exporters.

Feletti’s position is that one of the alternatives could be to increase export duties, or to advance in a cross-subsidized trust, as exists in the oil market, where part of the export earnings subsidize the prices of the domestic market. Within the economic team, they agree that withholdings have less weight due to the rise in products due to the exponential rise in international prices of raw materials.

The Government expects that the price increases for corn, wheat, and therefore meat will continue in the coming months. For a government sector, withholdings are a mechanism to “decouple” domestic prices from international ones. The Executive has the power to modify the withholdings by 3% for corn and wheat. However, they doubt whether the Government has the political power to implement a measure of this type, with the antecedent of the conflict over the 125.

In addition, in the economic team, Kulfas, Guzmán and Domínguez consider it essential to increase exports so that there is no shortage of foreign exchange. That is why the increase in withholdings or closing the export quota are today at the table of Domínguez, who this Monday held a meeting with his cabinet. Although the Ministry of Agriculture intends to summon the meat chain, there has not yet been any call, although the ministry admits that the dialogue is “constant.” During an event this weekend in El Calafate, Domínguez stated that exports must be increased to one million tons of meat, and defended the producers, by ensuring that “they are not price makers,” adding that he will not seek to “provoke to the weakest sector of the chain ”.

The discussion, agreed in the economic team, is how to establish a scheme that combines increases in exports, profitability to the sector, and supply of the domestic market. “Fine tuning”, they describe. For this reason, the options on the table that are not ruled out is to agree with the export consortium ABC to expand the supply of the domestic market for the popular prices of meat, where today 6,000 tons are supplied. In addition, from Agriculture they suggest that we must not stop looking at the medium and long term, and think about alternatives to expand for production, through financing or genetic improvement. The idea is to find an agreement that remains in force for all of 2022, and thus give “predictability” to the sector.