Subsidy to agro-exporters would exceed S/400 million per year

With the changes to Law 31110, of the agricultural labor regime and incentives for the agricultural and irrigation, agro-export and agro-industrial sectors, the sector’s overall contributions to Essalud will fall again to 6% (three points below the rest of economic activities) , when they were supposed to be standardized at 9% by 2025.

Former Minister of Economy Pedro Francke anticipates a fiscal blow of more than S/400 million in 2024 alone for the Social Security fund, an amount that must be covered by other taxpayers. That is to say, The health of formal agriculture will be subsidized with the taxes of others.

“This subsidy is not given by the Government, it forces us to give it to all the workers in the country. Because the rate reduction will cause large agro-exporters to save about 400 million soles, so workers will receive less attention, medicines and laboratory tests for that value,” he questioned.

There is also little chance that the Executive will observe the law—promoted by the Fuerza Popular bloc—since the Executive itself MEF He announced in November that he would lower health contributions from agricultural exports to “reactivate” it.

Agriculture yes, taxes no

Gabriel Amaro, president of the Association of Agricultural Producers Guilds of Peru (AGAP), believes that Essalud’s problem is not due to a lack of resources, but rather due to their poor administration. Instead, he emphasizes that the new law benefits all agricultural companies, and not just the segment that, last year alone, moved more than US$10 billion.

But Fernando Cuadros, former vice minister of Employment, remembers that, in reality, agricultural mypes with less than 100 workers and sales of less than 1,700 UIT per year were already considered for a 6% contribution until 2026, so, in practice, the main beneficiaries are the large agro-exporters, a cartel that “there are no more than 15 companies in which they occupy 40% of all employment”, such as Camposol, Virú, Pedregal, among others.

A situation also noted by Grade specialist Eduardo Zegarra, whose research reveals that, during the validity of the defunct agrarian promotion law, productivity per agricultural worker exceeded US$20,000 a year, but the daily wage did not break the average barrier of S/40.

“As in any sector, there are more MSEs than large companies, but 90% of all agricultural and agro-export employment is concentrated in the latter,” clarifies Cuadros.

Zegarra does not deny that the boom agroexporter has occurred under these flexibilities, but questions at what cost. It is estimated that, after 20 years of the agrarian law, for every S/100 of employer contributions, agricultural workers demanded S/262 in health.

Reactions

Pedro Francke, former Minister of Economy

“There would be no benefits for small and medium producers. It is a subsidy of those that neoliberals usually hate, except when they benefit the large companies they defend.”

Eduardo Zegarra, Grade specialist

“Congress and Executive grant generous subsidies to large agro-exporters at the expense of Essalud for the next 5 years. Will the supposed crisis in the sector last that long? I don’t think so, but yes the gollerías”.

Figures

• 2,700 Peruvian export companies registered shipments in 2022.
• 15.5% of the country’s total shipments are agricultural exports.
• 898,000 hectares were cultivated in Peru in the last 20 years.