ARGENTINE FARMERS’ BURDENS

Sun (Auckland), Volume 1, Issue 4, 26 March 1927, Page 18 (Supplement)

ARGENTINE FARMERS’ BURDENS

HEAVY TAXES ON PRODUCE New Zealand is not the only country operating on the world’s primary produce markets where the man on the land is suffering from increased taxation. An interesting resume of the trials of the South American grazier in this respect is given in the report of the Leibig’s Extract of Meat Co.. Ltd., for the year 1926 submitted by the chairman and managing director. Mr. C. E. Gunther. Dealing with the question, he says: In the charges over which he carexercise no direct control, however, and which weigh ever more heavily on his exploitation account, there is a wide field for considerable reduction. These are taxes both Federal and provincial. LEVY ON EXPORTS Taxation levied by the national Government in Argentina is indirect and takes the form of export duties on the produce of cattle exported from the country. It was imposed originally as a temporary measure during the war, and was in the nature of an excess profits tax, representing a percentage on the excess value of products over an established basis rate. For prime products it has been inoperative for some time, owing to their value having fallen below the basic rate established, but it still burdens by-products. Other Federal taxation is represented by the cost of veterinary service and inspection and the charges imposed by the administration of the cattle laws, of whose enactment the year 1923 was so prolific. While these taxes are apparently levied on the manufacturer or exporter, in reality they fall to be eventually borne by the farmer, the products of whose cattle have to be sold in the world’s markets in competition with those of other countries. CONCRETE EXAMPLES The incidence of taxation in Uruguay and in the provinces of Argentina is direct and has assumed the most formidable and alarming proportions. To cite some concrete examples, I will give you the figures of two of our principal estancias, in each of the territories in which our cattleraising activities are mainly centred. /. compared wi 1914, and taking in each case two representative properties, taxation on land for last year was higher by 504 per cent, and 391 per cent, in Uruguay, by 546 per cent, and 47S per cent, in Corrientes, and by 372 per cent, and 331 per cent, in Entre Rios. Translated into monetary equivalents, these percentages represent, always for the same two properties. the payment in hard cash for 1926. as compared with 1914, of £6OOO as against £I4OO in Uruguay,

of £B3OO as against £I6OO in Corrientes, and of £2200 as against £6OO in Entre Rios, and will serve to convey in a more readily appreciable form a sense of the magnitude of the burden that has been increasingly imposed on the farmer during recent years. Heavy taxes are also levied on the export of wool, hides, etc., from the provinces. If the Governments, therefore, are concerned that the cattle industry should recover its prosperity (and it is one of the most important, if not the most important industry in those countries), it behoves them to deal with the economic facts presented by the situation. These economic facts require not restrictive legislation, which will artificially enhance the price of the commodity and so curtail the markets which provide its outlet, but assistance in order to cheapen production and extend the scope of markets. This assistance can most easily and helpfully take the form of reduction in the heavy burden of taxation and freedom from all hampering legislation. The tendency of all commodities is definitely set, I think, toward a lower level of gold prices, and those who wish to retain their markets and dispose of their produce in the same volume as heretofore will be in the necessity of adjusting their costs of production to the falling level of values.