Argentina 's imposition of an export tax on whole soybeans that is higher than a similar tax on soybean meal and oil is costing the U.S. soybean industry up to $500 million annually, according to a study sponsored by the United Soybean Board.
"Our examination of this complex issue shows what results is an unfair subsidy in Argentina for processed soy products," says USB Vice Chairman Marc Curtis. And, he claims, "The difference in those tax rates has distorted the international soy marketplace."
According to the report, the lower tax burden on Argentina 's soybean meal, oil and biodiesel creates a strong economic incentive for processing soybeans in Argentina . The country then exports the value-added products rather than whole soybeans.
Argentina represents the third-largest soybean-producing country behind the United States and Brazil , but is now the biggest exporter of processed soybean products such as soybean meal, oil and biodiesel. Figures from the study show Argentina exports 99 percent of its soybean meal and 93 percent of its soybean oil in an average year.
LMC International, an independent economic and business consultancy serving agriculture, conducted the study for USB . It concluded that if the different tax schemes never existed, the United States would have invested more heavily in soybean crushing capacity with an eye on export markets, which would have boosted U.S. soybean prices.
