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Argentina, the world’s biggest seller of processed soybean meal and oil, raised export taxes on Saturday as the government seeks to fund spending under new President Alberto Fernandez.
After the peso’s 37% slump this year, his administration is replacing a levy of 4 pesos per dollar for many exports with a fixed charge of 9%, according to a decree in the official gazette.
But the document didn’t specify soybeans in a list of products, leading Eugenio Irazuegui, head of research at grains brokerage Enrique Zeni, to interpret that the oilseed, and grains such as corn and wheat, will revert back to a previous rate of 12%. Because soybeans and processed soy products already have an additional 18% charge, that would mean shipments of them are taxed a total of 30%.
Crop crushing and export group Ciara-Cec, whose members include the so-called ABCD giants of agricultural trading, confirmed in a phone message on Sunday that soy will be charged 30%, and corn and wheat 12%.
Read More: Panic Sweeps Argentine Pampas as Farmers’ Old Nemesis Returns
When former leader Cristina Fernandez de Kirchner, a foe to farmers and now Alberto Fernandez’s deputy, left the presidency in 2015, soy exports were taxed up to 35%, corn 20% and wheat 23%.
The government said the move -- nearly doubling the rate for corn and wheat, which have enjoyed a boom in recent years -- was urgent to meet its fiscal needs.
Fernandez took office on Dec. 10 amid a severe economic crisis, and talks loom with bondholders and the International Monetary Fund. The IMF has lent Argentina the majority of a record $56 billion credit line. Fernandez says the nation can’t meet its debt obligations if the economy doesn’t grow.
On Sunday, Fernandez told Radio Mitre that farmers shouldn’t be rattled by the hikes, explaining that he was simply getting rates closer to where they were a year ago, when the system of 4 pesos per dollar was brought in. The currency devaluation since then had diluted the tax.
The move had been widely telegraphed by growers, whose crops are worth a third of all the nation’s export dollars. The head of the Argentine Rural Society, Daniel Pelegrina, said in a radio interview the new taxes “will have a very big impact on farmers.”
Argentina is also enduring a severe drought on the Pampas arable belt.