After a devastating Jan drought in Southern states, Mato Grosso producers were bracing themselves to increase plantings and help contain corn & soy losses, until the lack of tech seeds made such planned production increase difficult in some areas and impossible in others. Now the governement of the state has announced a surprise hike in one of the many federal, state and municipal taxes (a tax called ICMS, which taxes movement of all goods) as it anticipated a revenue increase for the state's farmers. Farmers are now doubly angry: first at tech seed companies for lack of anticipation and inability to meet demand, and secondly at the governement for raising tax at such an inopportune moment (the gov says it needs more tax to repair & upgrade the roads after close to 30 years of doing "nada"). So the outlook for 2012/13 is lower production, lower revenues, higher taxes and rising costs due to a crumbling infrastructure (many people die on MT roads each year as these are not maintained and the unpaved, a majority, are not upgraded). Add to that rising wage costs (min Brazil salary was raised in Jan 12, which in itself is not bad, except that it comes at the wrong time), constantly changing regulation, drastic restrictions for foreign investors, rising oil prices...
The associations say that some farmers may relocate to other states...but the gov may not care, knowing how long it takes to sell a farm and start over again
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