In the booming agricultural area of Buenos Aires, silos overflow at the end of the harvest. Farmers are delaying sales while waiting for the ultra-liberal President, Javier Milei, to whom they gave their vote, to eliminate taxes and exchange barriers.
| Photo Credit: AFP

In the pampas, Argentina’s vast and fertile grasslands outside Buenos Aires, grain silos overflow with this year’s harvest — but nobody is selling just yet.

Though the country’s farmers largely gave their votes to President Javier Milei in the November election, they now want him to deliver on promises to slash taxes and ease exchange rate controls.

Until then, their bumper harvest will sit.

“The silos are full. One sells just enough to cover expenses,” Ricardo Semino, a farmer from Lobos, 110 kilometres (68 miles) southwest of Buenos Aires, told AFP as he finished harvesting his corn and wheat fields.

“Those who can wait, do so.”

After the country’s worst drought in a century saw agricultural exports plummet, leading to a shortfall of $20 billion in revenue, the industry is expecting an excellent harvest in 2024.

The latest estimate from the Rosario Board of Trade indicates that the grain harvest could yield 131.1 million tons, a sharp rise from the 82.2 million tons gathered in the previous year.

But farmers say that low global prices and the delay in freeing up the exchange rate at which producers can sell their goods abroad have complicated the seemingly good news.

Agriculture is a major part of Argentina’s economy, accounting for 55% of the country’s exports. It is among the world’s largest food producers, ranking third in soybeans behind only Brazil and the United States.

Argentina usually sells about 70% of its agro-industrial production, while the rest goes into storage.

Agricultural exports are estimated at $29.3 billion this year, falling short of the average $32 billion a year over the past five years.

Unsold crops

The combination of increased production and unfavourable economic conditions has left Argentina’s fields dotted with “silo bags” — basically, tons of harvested soybeans and grains wrapped in plastic.

Mr. Semino says sending grain to actual silos is a bit of a crapshoot.

“Usually you speculate when you send (the grain) to the silo plant,” he explained.

“Nowadays the silo plants, which belong to big companies, give you the possibility to deliver the grain and you can sell it within five, six, seven months or a year.”

The Rosario Board of Trade estimates that there are some 35.6 million tons of unsold grains in the country, valued at almost $10.6 billion.

Despite Mr. Milei’s campaign promises, he raised taxes on exports of soybean meal and oil from 31 to 33% upon taking office. Taxes also increased on fuel.

Reforms to exchange rate controls have not been forthcoming, and no timeline has been set. Inflation, though trending down, was still at 276.4% in May year-on-year.

Argentina has half a dozen dollar exchange rates. Exporters get a preferential rate, but still far less than the value of the peso on the parallel informal market (1,300 pesos to the dollar) — which is the rate producers use to pay for farming supplies.

Six months into Mr. Milei’s tenure, all of that translates into uncertain costs for farmers.

In the past year, “the price of a tractor went from $170,000 to $250,000,” Mr. Semino said.

Nevertheless, support for Mr. Milei persists in the countryside, with Mr. Semino explaining that a devaluation of the peso in December did help farmers.

‘Moving forward’

And despite all the uncertainty, the future still seems brighter.

Cristian Russo, head of estimates at the Rosario Board of Trade, said strong rains had boosted projections for the wheat harvest, with a 40% higher yield expected next season.

The agricultural sector does not stop production, no matter what happens in government, Mr. Semino explained.

“You get used to always moving forward,” he said. “Nobody is going to leave a field fallow because they are waiting for another government. You have to plant it and get the most out of it.”

Madrid:

Spain recalled its ambassador to Buenos Aires for consultations on Sunday after Argentina’s President Javier Milei made derogatory comments about Spanish Prime Minister Pedro Sanchez’s wife during a far-right rally in Madrid.

Milei had called Sanchez’s wife Begona Gomez “corrupt” during a rally in Madrid organised by the far-right Vox party and attended by many of its international allies.

Spanish Foreign Minister Jose Manuel Albares said he expected an apology from Milei.

Other ministers also condemned Milei’s speech, in which he described socialism as “cursed and carcinogenic”. Sanchez leads Spain’s Socialist Party.

“With his behaviour, Milei has brought the relationship between Spain and Argentina to its most serious state in recent history,” Albares said in a video statement.

Milei’s visit broke with diplomatic protocol as he refused to meet Spain’s King Felipe and Sanchez, instead preferring to promote his book alongside Vox leader Santiago Abascal at the party rally.

The European Union’s foreign policy chief, Josep Borrell, said in a post on social messaging app X that “attacks against family members of political leaders have no place in our culture”.

Spain’s main opposition party, the conservative People’s Party (PP), refused to support Madrid’s stance, with party sources saying that Sanchez should have provided explanations about the alleged corruption case weeks ago.

“His silence generates internal doubts, but also distrust abroad,” a PP source said, adding that the party’s job was to oppose the Spanish government and not Milei.

A city court said in April it was looking into accusations of influence peddling and business corruption against Sanchez’s wife, brought in a private complaint by Manos Limpias, or Clean Hands, an anti-corruption activist group.

However, Madrid’s prosecuting authority later said it was appealing to have the case thrown out for lack of evidence.

Sanchez decided to stay in office after five days of weighing his future once the probe against his wife was announced.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

President of Argentina, Javier Milei. File

Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.

Prices rose at a rate of 8.8% last month, the Argentine government statistics agency reported, down from a monthly rate of 11% in March and well below a peak of 25% last December, when Mr. Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.

“Inflation is being pulverized,” Manuel Adorni, the presidential spokesperson, posted on social media platform X after the announcement. “Its death certificate is being signed.”

Also Read: What is the outlook on the global economy? | Explained 

Although praised by the International Monetary Fund and cheered by market watchers, Mr. Milei’s cost-cutting and deregulation campaign has, at least in the short term, squeezed families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation, the statistics agency reported Tuesday, climbed slightly to 289.4%.

“People are in pain,” said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90% since Mr. Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand.”

Mr. Milei’s social media feed in recent weeks has become a stream of good economic news: Argentine bonds posting some of the best gains among emerging markets, officials celebrating its first quarterly surplus since 2008 and the IMF announcing Monday it would release another $800 million loan—a symbolic vote of confidence in Mr. Milei’s overhaul.

“The important thing is to score goals now,” Mr. Milei said at an event Tuesday honoring former President Carlos Menem, a divisive figure whose success driving hyperinflation down to single digits through free-market policies Mr. Milei repeatedly references. “We are beating inflation.”

Shrinking economy

Even so, some experts warn that falling inflation isn’t necessarily an economic victory—rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.

“You’ve had a massive collapse in private spending, which explains why consumption has dropped dramatically and why inflation is also falling,” said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics who studies emerging markets. “People are worse off than they were before. That leads them to spend less.”

Signs of an economic slowdown are everywhere in Buenos Aires—the lines snaking outside discounted groceries, the empty seats in the city’s typically booming restaurants, the growing strikes and protests.

At an open-air market in the capital’s Liniers neighborhood, Lidia Pacheco makes a beeline for the garbage dump. Several times a week, the 45-year-old mother of four rummages through the pungent pile to salvage the tomatoes with the least mold.

“This place saves me,” Pacheco said. Sky-high prices have forced her to stick to worn-out clothes and shoes and change her diet to the point of giving up yerba mate, Argentina’s ubiquitous national drink. “Whatever I earn from selling clothes goes to eating,” she said.

Mr. Milei, a self-proclaimed “anarcho-capitalist” and former TV personality, warned his policies would hurt at first.

“It’s not his fault, it’s the Peronists who ruined the country, and Mr. Milei is trying to do his best,” said Rainer Silva, a Venezuelan taxi driver who fled his own country’s economic collapse for Argentina five years ago.

Spain’s Prime Minister Pedro Sanchez. File.
| Photo Credit: Reuters

Spain on May 4 denounced comments by Argentina’s presidency which had accused the Spanish government of bringing “poverty and death” to its own people.

The office of Argentinian President Javier Milei had published a statement on X, accusing Prime Minister Pedro Sanchez of damaging Spain’s economy and stability.

The post appears to have been in reaction to earlier comments from Spanish Transport Minister Oscar Puente who had suggested Mr. Milei is on drugs.

“The Spanish government categorically rejects the unfounded words… which do not reflect the relations between the two countries and their fraternal people,” the Spanish foreign ministry said.

Mr. Milei’s office also accused Mr. Sanchez of “endangering the unity of the kingdom, by sealing an agreement with the separatists and leading Spain to its ruin”, an allusion to a pact Sanchez’s Socialist Party struck with Basque and Catalan regionalist parties to form a government.

Mr. Milei will travel to Spain in two weeks for an event on May 18 and 19 organised by the far-right opposition party Vox, which is in a race with the Socialists in next month’s European elections.

Buenos Aires, Argentina:

President Javier Milei’s “chainsaw” approach to budget cuts have not only caused deep financial pain to many Argentines, but is also threatening the country’s Oscar-winning culture scene, industry players say.
At home and abroad, actors, directors and musicians accuse the self-declared “anarcho-capitalist” leader of showing disdain towards their industry as he slashes funding and rails against those who question him.

Milei himself has said the government must choose between “funding movies that nobody watches” and “feeding people.”

He has denounced at least one artist criticizing his funding cuts as a “parasite” living off taxpayer money at the expense of hungry kids.

The cultural industry in Argentina, the birthplace of tango, is responsible for some 300,000 formal jobs.

But under Milei, “they are dismantling everything related to culture in general and cinema in particular,” award-winning Argentine actress Cecilia Roth, who has played in several movies by Spain’s Pedro Almodovar, said at a press conference in Mexico on Friday.

On top of losses in direct state support, the industry is also reeling from the average Argentine having much less money to spend on such luxuries as films or plays as disposable income has shrunk and poverty levels have risen to 60 percent.

– ‘Little hope’ –

Argentina’s Incaa film institute has dismissed 170 of its 645 employees in recent months, suspended overtime payments and is not accepting any new projects for a period of 90 days.

Incaa is financed mainly by taxes on ticket sales and 25 percent of the revenues of the National Communications Agency which co-finances dozens of films every year, including eight Oscar nominees and two winners: “The Official Story” and “The secret in their eyes.”

“Every day the panorama is darker,” Argentine production and audiovisual director Paula Orlando, told AFP.

“I am considering leaving the country,” added the 31-year-old, who has 12 years of experience in the industry.

“There is little hope.”

– ‘Strong bias’ –

Voices of concern have also been raised abroad, from directors such as Almodovar himself, and Finland’s Aki Kaurismaki.

Earlier this month, Belgian film-making siblings Jean-Pierre and Luc Dardenne, France’s Claire Denis and American Viggo Mortensen penned an article in which they said Argentina’s cinema industry was “on the brink.”

Music and literature, too, have suffered the effects of Milei’s cost-cutting measures, including the repeal of a law protecting independent book stores from being undercut by large chains.

Such actions go to show that Milei and his government carry “a strong bias against cultural industries,” according to Martin Gremmelspacher, president of the Argentine Book Chamber.

Book sales, he said, fell 30 percent in both January and February from a year earlier.

– ‘Dangerous’ future –

Luis Sanjurjo, a professor of cultural policies at the University of Buenos Aires, said it was wrong to think that “the market can replace the state.”

“In no serious capitalist country in the world is there an absence of the state” in the development of culture, he told AFP.

Sanjurjo formerly headed an arts and culture industry sub-division in the now-defunct culture ministry, scrapped by Milei.

He said it appeared the ultra-liberal Milei government was “bitter” towards the industry amid the global culture wars increasingly pitting people against each other on issues such as gay rights, abortion, religion, women’s rights and even political correctness.

Last week, renowned Argentine concert pianist Martha Argerich published an open letter lamenting the government’s decision to stop the issuing of grants to impoverished artists under a scholarship named after her.

Culture Minister Leonardo Cifelli later said the decision was merely the temporary result of an “administrative transition,” without saying when the grants would be resumed.

“I myself received the support of the Argentine State as a young girl,” Argerich wrote.

“If the state does not support and contribute to culture, the future is really dangerous.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Argentina’s President Javier Milei speaks during the opening session of the 142nd legislative term, at the National Congress, in Buenos Aires, Argentina, March 1, 2024.
| Photo Credit: REUTERS

Argentina’s libertarian President Javier Milei, in his first policy speech to parliament on Friday, said he would push his package of sweeping economic reforms whether or not legislators back it.

“We are going to change the country for good… with or without the support of political leaders, with all the legal resources of the executive,” Mr. Milei told lawmakers, who have stalled his project of deregulation and budget cuts.

“If you look for conflict, you will have conflict,” he told them.

Mr. Milei offered a recap of his first 82 days in office, in which he devalued the peso more than 50%, slashed state subsidies for fuel and transport, cut tens of thousands of public service jobs, and scrapped hundreds of rules in his bid to deregulate the economy.

“I ask for patience and trust,” Mr. Milei said. “It will be some time before we can perceive the fruit of the economic reorganization and the reforms we are implementing.”

Many of his planned reforms face challenges in court, with more than 60 lawsuits under way by labor unions, business chambers and NGOs, while Argentina has seen massive protests by citizens who fear Milei’s plans will leave them poorer.

“We have not yet seen all the effects of the disaster we inherited, but we are convinced that we are on the right path, because for the first time in history we are attacking the problem by its cause: the fiscal deficit, and not by its symptoms,” Mr. Milei said.

In recent weeks, Mr. Milei has reached out to influential provincial governors, party leaders and former Presidents to forge a “new social contract” for the country, based on ten principles, including a “non-negotiable” balanced budget, “inviolable” private property, and public spending reduced to the “historic” level of 25% of GDP.

Decades of mismanagement

Faced with parliamentary reticence, Milei scrapped almost half of the initial 664 articles in the sweeping deregulatory measure issued after he took office, then withdrew it altogether.

But the president has vowed to return his Bill to parliament. And he has threatened to pass his reforms by Presidential decree if lawmakers do not fall in line.

Argentina is grappling with severe economic struggles after decades of mismanagement that has driven poverty levels to nearly 60% and pushed inflation to an annual rate over 200%.

Mr. Milei, a 53-year-old political outsider, won a resounding election victory last year on a wave of fury over a financial crisis marked by rampant money printing and fiscal deficit.

The government claims some of Mr. Milei’s changes are already bearing fruit: In January, Argentina reported its first monthly budget surplus in 12 years while boosting foreign currency reserves from $21 billion to $27 billion.

But as annual inflation continued to bite, the poor were hit hard as Mr. Milei also ripped away generous transport and energy subsidies and froze aid to 38,000 soup kitchens pending an audit.

Mr. Milei insists Argentina has to swallow a bitter pill to rescue the economy, and has warned the population to brace themselves for things getting worse before they get better.

Argentina’s economy minister and the anti-establishment upstart he faces in a presidential runoff next month began competing Monday to shore up the moderate voters they need.

Economy Minister Sergio Massa earned almost seven points more than chainsaw-wielding economist and freshman lawmaker Javier Milei in Sunday’s vote. Most polls had shown Mr. Massa slightly trailing, as voters had been expected to punish him for triple-digit inflation that has eaten away at purchasing power and boosted poverty.

On November 19, voters will either choose Mr. Massa, despite the economic deterioration that took place on his watch, or place their hopes in a self-described anarcho-capitalist who promises a drastic shake-up of South America’s second-largest economy.

Mr. Milei’s fiery rhetoric and radical proposals — like slashing subsidies that benefit a large swath of the population and replacing the local currency with the dollar — galvanised die-hard supporters, but cost him support among more moderate voters.

Mr. Massa focused his messaging in the latter part of the campaign on how Mr. Milei’s budget-slashing chainsaw would negatively affect citizens already struggling to make ends meet, with a particular focus on how much public transportation prices in Buenos Aires would increase without subsidies, said Mariel Fornoni of the political consulting firm Management and Fit.

That “had a significant impact and evidently instilled more fear than anything else,” Ms. Fornoni said.

Mr. Massa once again showed his Peronist party’s power to mobilise Argentine voters. A political movement named after former President Juan Domingo Perón that has both left- and right-wing factions but broadly believes in social justice and workers’ rights, Peronism has been a dominant force and in this election cycle emerged as the only viable left-leaning option.

Right-wing votes were divided between Mr. Milei, former Security Minister Patricia Bullrich of the main opposition coalition and another candidate, Cordoba province’s Governor Juan Schiaretti. Ms. Bullrich finished third in the field of five candidates, and the runoff will be decided by where her voters ultimately migrate.

She said in her concession speech Sunday night that she wouldn’t congratulate Mr. Massa on his victory because he was part of “Argentina’s worst government,” and that her coalition would never support “the mafias that have destroyed this country.” She stopped short of endorsing Mr. Milei, however.

During the campaign, Mr. Milei harshly criticised Ms. Bullrich as part of the entrenched elite that required purging, but he sought to appeal to her voters in a radio interview Monday, suggesting that they should focus on the bigger picture.

“Everyone who wants to change Argentina, who wants to embrace the ideas of freedom, are welcome,” Mr. Milei said. “It’s not a matter of labels; it’s a matter of who wants to be on this side.”

Asked in a news conference Monday whether he foresees challenges in siphoning support away from Ms. Bullrich, Mr. Massa responded that “leaders aren’t the owners of votes” and that several views espoused by Mr. Milei “have nothing to do with our culture and the values of the average Argentine citizen.”

Mr. Massa also said he would not want his government to be characterized as only Peronist.

“I believe it’s a mistake to suggest that the upcoming phase should be tied solely to Peronism. We are heading toward a government of national unity. I will call upon the best from various political forces, regardless of their origin,” Mr. Massa said.

Mr. Massa had already told voters that he inherited a bad economic situation exacerbated by a devastating drought that decimated exports. He reassured them that the worst was past.

With nearly all ballots counted Monday, Mr. Massa, 51, had 36.7% of the vote and Mr. Milei, 53, had 30%. Ms. Bullrich got 23.8%

In his radio interview, Mr. Milei characterised Mr. Massa’s results as the minister’s “ceiling” and said his showing marked a “floor”.

Mauro Salvatore, a 23-year-old programmer, said outside Milei’s campaign headquarters Sunday night that he is optimistic Mr. Milei will pick up the votes that went to Bullrich in the first round.

“We have a clear possibility. We find ourselves in a situation we knew wouldn’t be easy, but you can see the Argentine people are tired and really want change, independent of whether it will be Milei or Bullrich,” said Mr. Salvatore. “We have a lot of faith that some of Bullrich’s voters can be taken, given it’s understood they have more inclination toward Milei’s ideas than Massa’s.”

Analysts, however, questioned whether those votes would automatically transfer to him. Some of the more progressive elements of Ms. Bullrich’s coalition were already making clear Monday they would not support Mr. Milei, who has raged against the so-called “political caste,” vowed to eliminate half the government ministries and slash public spending.

And some analysts warned a runoff scenario may not be conducive to Mr. Milei’s combative style.

Mr. Milei is “an inexperienced candidate, lacking political expertise, who perhaps may not have the capacity to understand that the current scenario will require him to moderate, build political agreements, and appeal to voters who might ask for changes in his political proposal,” said Lucas Romero, head of Synopsis, a local political consultancy.

Mr. Milei’s casting himself as a culture warrior against the creep of the so-called “socialist agenda” appears to be a headwind, said Benjamin Gedan, director of the Latin America Program at the Washington-based Wilson Center. Mr. Milei has been endorsed by Brazil’s former far-right President Jair Bolsonaro and says he shares a common mission with former U.S. President Donald Trump. Some supporters wear hats that read “Make Argentina Great Again”.

Mr. Gedan described Milei’s opposition to abortion and gun control, among other positions, as “out of sync with Argentine society”.

Sovereign bonds plunged Monday and there was a selloff in Argentine equities as the market predicted that Mr. Massa’s first-round surprise means the government has little incentive to correct any of the economy’s imbalances for now. In the run-up to the vote, Mr. Massa boosted welfare programs and implemented tax cuts that benefited almost all registered workers, going against calls from the International Monetary Fund for austerity and removal of subsidies.

Mr. Massa “was able to build over the last two months through some tax holidays and other giveaways that could be fairly deemed populist,” said Brian Winter, a longtime Argentina expert and vice president of the New York-based Council of the Americas. “It’s going to be really interesting to hear what he says in the next few weeks, because he will need to win over some more moderate voters in order to win.”