SOY HARVEST, FONDAGRO

Another hot and dry summer week around a long weekend might be good news for tourists but it remainsbad news for the farmer and the country’s export earnings. Drought has already caused the estimates of this year’s soy harvest to be scaled down to 50 million tons as against last year’s 55 million and the final total could be as low as 45 million. Global commodity prices are edging up in response to this scarcity but not enough to compensate for the loss of production – export earnings stand to lose at least US$3.7 billion. As a result, the government is dragging its feet for the second year running on its 2015 campaign pledge to cut soy export duties by an annual five percent. Last year the cut was compensated with the announcement that the money (some 1.7 billion pesos) would be used to finance a Fondagro fund to aid regional economies – in the end this fundwasgivenabudgetof700millionpesos of which 500 million were spent. This year the government is proposing to scrap this fund altogether.