Argentine President Mauricio Macri said he would sign a decree on Monday eliminating corn and wheat export taxes as part of his plan to revitalize the country's massive farm sector after years of antagonism with the government.
The decree will also cut the export tax on soybeans, the country's main cash crop, from 35 percent to 30 percent.
Argentina is a major producer of grains and livestock. The increased output expected to result from Macri's policies would put downward pressure on world food prices, making it easier for people in poor consumer nations to eat.
A major plank of Macri's campaign ahead of the Nov. 22 election was his promise to bolster agricultural production by cutting taxes imposed by previous President Cristina Fernandez.
Macri, who promises free-market solutions to Argentina's long list of economic woes, defeated a candidate from Fernandez's party. He took office on Thursday.
"Today, as I promised during the campaign, I am betting on the farm sector's ability to increase production," Macri told a group of growers gathered for the announcement. "As soon as I land in the capital city, I will sign the decree."
The event took place at a farm in the town of Pergamino, in the heart of the Pampas grains belt in Buenos Aires province.
The 32 percent tax on soymeal and soyoil exports was also to be cut by 5 percentage points. Growers said they expect the government to honor its promise to ditch Fernandez's wheat and corn export quotas as well, maybe even as part of the same decree. No one from the government could be reached for comment.
The quotas, meant to ensure ample domestic food supplies, have pushed growers out of wheat and corn, resulting in the over-planting of soy on the Pampas over recent years.
Corn exports have been taxed at 20 percent and wheat at 23 percent. The decree will also eliminate a 15 percent export tax placed on beef exports. Macri's policies are expected to spark a big increase in crop rotation, which would help preserve soils and contribute to an increase in overall grains production.
Racing to Grow More Corn
Fernandez had feuded with the country's growers since protests over her tax policies paralyzed the agriculture sector and rocked her government in 2008. After two terms in office, she left Argentina with inflation estimated at more than 20 percent, a yawning fiscal deficit and low central bank reserves.
The government estimates the country's grains production will grow to 130 million tonnes per year from the current 100 million tonnes during Macri's first term, ending in 2019.
"We have been fighting for this for years," said Pedro Vigneau, who manages 2,500 hectares (6,178 acres) of grains and cattle land in the bread basket province of Buenos Aires.
"The government is now supporting the farmers, which is really new for Argentina," he said. "Now the ball is in our field. We are responsible for increasing production."
Argentina's farmers are racing to grow more corn now that Macri has taken power, increasing the area planted by 10 percent over previous estimates and making more exports likely from one of the world's biggest suppliers. They can plant corn until mid-January, while wheat goes into the ground midyear.
More than 90 percent of corn planted in Argentina is genetically modified. Sales of GMO seeds have jumped since the election, as have those of related agro-chemicals and the weed killers glyphosate and atrazine sold by Monsanto Co and other companies.