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Government paves the way for a new tax shock for agro-exports

Government paves the way for a new tax shock for agro-exports

On November 8, the Peru Libre bench presented PL 658/2021-CR, a bill for the second agrarian reform (SRA), with the purpose of promoting and technifying agriculture from a comprehensive perspective, with a particular approach on the role of agro-exporters and the tax regime to which they are subject. Three months later, the then congressman and today head of the sector, Oscar Zea, resumes the project of his authorship.

During the first council of ministers of the Torres cabinet, on February 9, the new head of Agriculture referred to agro-exporters as “brothers” and He said that they are going to work hand in hand with small farmers to take what they produce and cultivate to the markets, but in exchange for tax incentives according to the percentage of production. For this, he considered vital to unlock the autograph of law in the Congress.

”The market represents a challenge. For this reason, what our producers need are markets and the business brothers, the agro-exporters, who know the market in the export process, will be able to connect them with said markets,” said Zea.

However, for the producers, this statement represents a “true nonsense.” The National Convention of Peruvian Agro (I agree) assures that the second agrarian reform is being used for projects with their own interests that have not received the consent of the organizations from the interior of the country; an initiative evicted by the lack of plurality with the main agents of the true reform of the sector: the farmers.

”Giving back privileges to agro-exports, based on pseudo-training, is not pertinent. It is a total ignorance of the sector, there is no provision to regulate the operation of cooperatives to generate competitive conditions. Those cooperatives would like to have the tax benefits offered by Mr. Zea. When we talk about laws, they should be for everyone,” said Clímaco Cárdenas, president of Conveagro.

They look for synergies

For the Association of Agricultural Producers Guilds of Peru (AGAP), the proposal (training, joint work) is a front that the guild has been promoting for about four years with different ministers and governments.

”All the good things that family farming already has, put it in marriage with the agribusiness companies, which has been taking place in some crops not at the pace that is needed, the idea is that the State gives an incentive for this relationship to happen, but this It has to be conditional on the company providing the transfer of technology, knowledge and access to inputs, and that a percentage of its sales come from small-scale agriculture, so that there are also many more companies in the sector than there are today. day competing with the farming family. This competition has to bring more favorable conditions for the farmer”, said Alejandro Fuentes, president of AGAP.

Fuentes explained that the incentive would have to be on IR, although he does not know the details of the proposal. “But I think it should be staggered based on how much of the agribusiness company’s sales comes from family farming, the more, the greater incentive, the less, none. There has to be a relationship that really promotes that the small agribusiness, for example the one that today is on the coast, start working not only with the one from the mountains, but with the one literally next to them.”

They abandon the agrarian reform

By Eduardo Zegarra, GRADE researcher

Minister Zea’s first statement explicitly addressed the granting of possible tax exemptions or benefits to the agro-export sector, and stated that it would be a central issue of the SRA.

This is absolutely contrary to what this initiative seeks, oriented towards family, communal and cooperative agriculture. The idea of a role for agro-exporters to promote the work that the State should do with small-scale agriculture, in exchange for generous tax benefits –which in itself they have had for more than 20 years–, has no sustenance.

The agro-export sector today enjoys the Agrarian Promotion Law, which gives it tax benefits of reducing IR by half and a totally flexible and anti-rights labor regime, where there is a reduction in payment by Essalud from 9% to 6%, against of the agricultural worker.

It is an already consolidated sector that should not continue to receive this type of advantage. All this configures a scenario of total uncertainty about the Government’s intentions with agriculture, the beginning of the abandonment of the great promise made by the president Castle last October 3. The SRA is used for projects with their own name.

That is not right.

Source: Larepublica

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