Hi all,

Since March 2002, all Argentinean exports pay what is called «export duties»
ranging from 5% for industrial products up to 40% for petroleum derivatives.
This tax is applied over the FOB value declared by the exporter.

In the meantime, we have now the recent rural farmers strikes and road
blockades, all of them complaining about the extremely high export taxes for
soya beans, corn, sunflower and dairy products.

In the case of natural honey, during the last seven years the local
beekeeping industry has paid export duties of 10%. The total amount
collected by the federal government from beekeepers since year 2002 has
exceeded over U$S 100 million dollars. Only during fiscal year 2008, the
government collected U$S 18 million dollars (total exports were 68,000
metric tons worth U$S 180 million dollars)

On March 10th. 2009, the Argentine government proposed to farmers union`s
the refund to both the beekeeping and the wool industries, of half of the
current export taxes. Therefore, the export tax for honey would remain at
10% of the FOB price. But 5% of it would eventually go back to the
beekeepers who suffered the deduction in the first place. Needles to say, it
is obvious that exporters deduct this tax from the price paid to beekeepers.

Government officers estimate that the total elimination of this tax would
only benefit current exporters. In what is known as an imperfect oligopsonic
market, with five exporters concentrating over 70% of total purchases, there
is no way to guarantee that the money would go back to the beekeepers.

However, so far in the Federal Register there has not been any law amendment
notifying about this tax refund.

Juanse Barros wonders whether this tax reimbursement might constitute
dumping. Not at all according to WTO regulations because this reimbursement
is not a subsidy. Argentina is one of the few countries taxing its exports.
During the late 1990`s and early 2000`s the tax structure of exports was
quite different in Argentina. There was some fraud involving the
reimbursment of Value Added Taxes which are no longer an issue now.

Hope this clarifies the matter.

Sincerely,


Martin Braunstein
www.malkaqueens.com

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