(Adds quotes from farm group leaders, details of tax increaseplan)By Hugh Bronstein and Maximilian HeathBUENOS AIRES, Sept 3 (Reuters) - Argentine farmers may delaywheat sales and plant less corn this year after the governmentannounced a roughly 10 percent export tax on the grains onMonday as part of an austerity program designed to halt a run onthe peso currency, growers and consultants said.The measures announced by President Mauricio Macri's
government include a tax of four pesos per dollar on wheat andcorn shipments. That is currently equivalent to about 10 percentbut it would decline if the peso keeps falling.
While this season's wheat crop has already been planted,Argentina farmers may weigh the tax implications as they prepareto plant corn next month."This will make farmers sit down and recalculate how muchcorn they're going to plant," said David Hughes, a grower andpresident of the Argentrigo wheat industry chamber. He addedthat wheat sales could also be delayed as farmers watch thevalue of the peso."Farmers will be playing the exchange rate," he said.The new farm tax system is included in a package of measuresArgentina is proposing to the International Monetary Fund tounlock early cash disbursements of a $50 billion standbyfinancial agreement at negotiated earlier this year.
The tax revenues are needed to help reduce the fiscaldeficit and calm market jitters about Argentina's ability to payits debts next year, much of which is in U.S. dollars.Investors' concerns sparked a 16 percent loss in the valueof the Argentine peso against the U.S. dollar last week alone,bringing to almost 50 percent its losses so far this year. Argentina, with its vast Pampas grains belt, is the world'sNo. 3 exporter of corn and raw soybeans. It is also the world'stop exporter of soymeal livestock feed and soyoil, used inmaking biofuels, as well as a wheat supplier, mainly toneighboring Brazil.As much as farmers may want to hang onto their wheat cropsto take advantage of the swooning peso, they will need to sellat least some of their stocks to buy seeds and inputs forplanting of the country's main cash crop, soybeans, in October.A 25.5 percent export tax that had been put on soybeans wasdropped on Monday to 18 percent, as has the 23 percent taxplaced on international soyoil and soymeal shipments.
But on top of that 18 percent tax, the three products willnow be slapped with an additional levy of 4 pesos per exportdollar, bringing the effective tax hike on soybeans andbyproducts to 3 percentage points."Soy export taxes will be a little higher. The impact onwheat and corn will be quite important," said Gustavo Lopez,head of the local Agritrend consultancy. "We will probably seean effect on corn plantings."
'NOT GOOD NEWS'Growers are a major source of political support for Macri,who won office in late 2015 on a platform of ending the currencyand trade controls favored by his populist predecessor CristinaFernandez, who feuded openly with the farm sector for years.Macri defended the tax increases, which are due to end in2020, as an emergency measure. He said exporters who hadbenefited from the slump in the peso needed to contribute moreto the country's deficit-cutting program.It is the primary fiscal deficit, projected at 2.6 percentof gross domestic product this year, that sparked questionsabout Argentina's ability to honor its 2019 debt obligations
Farm groups panned the tax increases as an added expense forgrowers already struggling with high financing costs and theeffects of a drought that hobbled this year's soy harvest.Farmers say their costs have risen this year as many
agricultural inputs like pesticides are priced in dollars."This is a hard blow to farmers," said Dardo Chiesa,president of growers' umbrella group CRA. "They did not consultwith us at all. It was presented as a done deal."The FAA chamber representing smaller farms said the newmeasures will not help growers with problems like highinflation, clocked in July at over 31 percent, and highborrowing costs after the central bank hiked its main interestrate to 60 percent last week.Growers, like all Argentines, are also contending withhigher energy bills since the government cut public utilitysubsidies as part of its deficit reduction program."When the president talks about the 'most vulnerable'members of society, he needs to understand this includes small-
and medium-scale farmers," Omar Pr?-ncipe, president of the FAAsaid in a statement. (Reporting by Hugh BronsteinEditing by James Dalgleish and Cynthia Osterman)