In recent years, the producers of pears and apples of Rio Negro and Neuquén have seen how the possibilities of placing their production in the world markets has dwindled as a result of an oversupply of fruit and Europe's loss of purchasing power.
In 2015, the economic situation of two of the country's key destinations, Russia and Brazil, is likely to be the straw that breaks the camel's back as, in 2014, 55% of the country's pear exports and nearly 40% of apple exports were destined to these two countries.
Overall, according to a report by the Federation of Rio Negro's and Neuquén's Fruit Producers, Argentina's Chamber of Integrated Fruit Growers (CAFI), and Argentina's Chamber of Medium Enterprises (CAME), pear sales abroad fell by 7.2% in 2014 and apple volumes declined by 9.7%. The year accentuated the sector's losses, both in volume and prices.
This balance was presented to the ministers of the country in a meeting in which they asked for 92 million dollars in financial aid this year. The organizations said that it was impossible for them to place their production at competitive prices due to the devaluation of the currencies in the markets that buy from Argentina (Euro, ruble and real) and in competing countries such as Chile and South Africa.
Additionally, the oversupply of fruit in the northern hemisphere brought down prices between 20% and 40% in 2014, depending on the species and variety. At the same time, with Russia out of the market, other providers are redirecting their production to Brazil and causing similar effects.
This, coupled with the rising domestic costs in dollars reported by the entities in recent years, is leading the primary activity to bankruptcy, said the CAME in a statement.
Additionally, Brazil imposed 14 non-automatic licenses on Argentina since October.
Producers are asking the national government to eliminate deductions that today reach 5%, but that according to producers involve 20% of production costs. They also requested the reinstatement of export refunds to historical levels. In 2002, they explained, these reimbursements decreased from 10.5% to 5%.
Additionally, they've asked that, given the high levels of the technical VAT paid by the industry, that it is taken into account against the payment of taxes or employer contributions. The meeting, which was held at the Casa Rosada, was attended by the Cabinet Chief, Jorge Capitanich; the Minister of Economy, Axel Kicillof; pair of Agriculture, Carlos Casamiquela, the governor of Rio Negro, Alberto Weretilneck, and Senators Miguel Angel Pichetto and Aníbal Fernández.
Another meeting at the Ministry of Agriculture was scheduled for this morning, where a working group was convened to continue working on the request of the fruit sector, the main economic activity of the Upper Valley.
Source: cronista.com