Argentine grain industry says government dredging bill raises export costs

RIO DE JANEIRO, BRAZIL – The costs of Argentina’s grain exports would increase under a new government bill in which ships would pay tolls to the state rather than to the company dredging the Paraná River, industry members said Monday.

The Argentine government disagrees, saying the proposal is in fact intended to lower logistical costs while increasing the country’s agricultural production.

This is the latest chapter in a long-running saga of Argentine farmers and exporters opposing government interventions in the sector. Dredging the waterway is considered an advantage for the country over rivals Brazil and the United States, which rely on less efficient trucks and barges.

Last week, the government disclosed its proposal for the management of the river.

It provides that the state, rather than the company dredging the waterway, should receive the tolls ships pay to use the Rosario export terminal, from which some 80% of Argentina’s grain shipments depart.

The bill angered exporters and producers who fear the policies of center-left President Alberto Fernández’s government, whose administration has limited beef exports as a way to control domestic food inflation.

The government should oversee the logistics system and ensure transparency in the bidding process for dredging services, said the president of Argentina’s chamber of private ports Luis Zubizarreta.

However, he believes that the company performing the dredging, not the government, should continue to receive the toll paid by ships. “The current system works well, with river users paying the tolls directly to the dredging company. We need to maintain this,” Zubizarreta stated. “If the flow of money goes through the state, the cost of dredging services will increase,” he added.

But a source at the country’s Transport Ministry, who asked not to be identified, said the bill for the dredging system would not raise shipment costs. “It does not imply a higher cost. One of our goals is to reduce the cost of logistics,” he said.