Few agricultural powerhouses tax their farmers for exporting. Argentina has done so for more than two decades. Since 2002, export taxes, known locally as "retenciones", have been a central element of the country's agricultural policy, generating significant public revenue while also limiting incentives for production and investment. For much of the past two decades, export taxes have represented between 6% and 10% of Argentina's total tax revenue, highlighting why successive governments found them so difficult to remove. A new legislative proposal could change that reality. The government has established a formal and legally backed roadmap for their gradual reduction through 2028. The announcement marks one of the most significant agricultural policy reforms in recent decades and could have important implications not only for Argentine farmers, but also for international buyers, traders and investors, including those in the Netherlands.
Beeld: © Bolsa de Comercio de Rosario
What are the “Retenciones” - and why do they exist?
Export taxes are rare in international trade. Most countries tax imports, very few systematically tax exports, particularly those originating from their most competitive sectors. Argentina is an outstanding exception.
Although export duties on Argentine agricultural products had been mostly eliminated in 1992, they were reintroduced in 2002 as an emergency fiscal stopgap measure following the country's historic 2001 debt crisis and subsequent default. The crisis was severe: unemployment hit 20%, poverty exceeded 58%, and the government was shut out of international capital markets. Under the congressionally emergency government, export duties were reintroduced as an emergency measure to generate revenue and stabilize public finances.
The further commodity boom of 2002–2008 meant that export taxes generated exceptional fiscal revenues as world prices climbed. So, what had been framed as a temporary emergency measure quietly became structural.
Over time, export taxes also served other policy objectives. Besides generating revenue, they were used to keep domestic food prices below international levels and to redistribute part of the income generated by the agricultural sector to other parts of the economy.
At their peak, export taxes on soybeans reached 35%, among the highest agricultural export taxes applied globally. In 2008, the government sought to raise them further through a variable-rate system linked to international commodity prices. The proposal sparked widespread opposition from the agricultural sector and led to one of the most significant political debates in recent Argentine history. Ultimately, the Senate rejected the measure by a single vote, illustrating the economic and political importance that “retenciones” had acquired in the country.
Beeld: © Bolsa de Comercio de Rosario
Why were export taxes not removed earlier?
For years, successive governments acknowledged the negative effects of export taxes on investment, productivity and competitiveness. Yet eliminating them proved politically and fiscally difficult.
The reason was simple: export taxes became an important source of government revenue. In a country characterized by recurring fiscal deficits, high inflation and limited access to international financing, few administrations could afford to give up such a significant income stream.
Former President Mauricio Macri reduced several export taxes after taking office in 2015. However, the reforms coincided with rising domestic food prices and generated political resistance. The experience reinforced a lesson that continues to shape Argentine politics today: reducing export taxes without first restoring macroeconomic stability can be difficult to sustain.
Beeld: © LAN Cono Sur
Why things are changing now?
The current reform is closely linked to Argentina's improving macroeconomic situation.
Since taking office in December 2023, President Javier Milei's administration has focused on fiscal consolidation, inflation reduction and economic deregulation. After achieving Argentina's first primary fiscal surplus in more than a decade, the government argues that it now has the fiscal space needed to gradually reduce one of the country's most distortionary taxes.
The newly announced schedule reduces export duties on wheat and barley immediately and establishes a gradual reduction path for soybeans, corn, sorghum and several biofuel products through 2028. According to the government, the ultimate objective remains the complete elimination of export taxes while preserving fiscal balance.
Perhaps even more important than the reductions themselves is the predictability they provide. For the first time since 2002, producers, exporters and investors have visibility regarding the future direction of export taxation. In a country where policy uncertainty has often been a greater challenge than taxation itself, this may prove to be the most significant aspect of the reform.
Beeld: © AI generated, LAN Cono Sur
What could this reform mean for Argentine agriculture?
Lower export taxes improve profitability throughout the agricultural value chain, strengthening incentives to invest in production, technology and infrastructure. Grain and oilseed producers are expected to benefit the most, as soybeans, corn, wheat and barley account for a large share of Argentina's export earnings. Higher profitability could accelerate investment in precision agriculture, storage, irrigation, digital technologies and value-added processing.
Argentina's agricultural competitiveness, however, is not new. The country's comparative advantage is built on the fertile Pampas, large-scale commercial farming, early adoption of no-till agriculture and precision farming, and an efficient export corridor centred around the Paraná River, one of the world's largest soybean crushing and export hubs. These structural strengths have allowed Argentine producers to remain globally competitive despite more than two decades of export taxes.
Paradoxically, this is precisely why “retenciones” have long been considered so distortionary. Rather than eliminating Argentina's competitive advantage, they have reduced profitability and discouraged investment, innovation and value addition. The government's gradual reform is therefore expected not to create competitiveness, but to unlock productive potential that has long existed.
A frequently raised question is whether greater profitability could encourage agricultural expansion into native forests, particularly in the Gran Chaco. While this risk cannot be dismissed, today's context differs markedly from previous expansion cycles. Access to the European market is increasingly conditioned by the EU Deforestation Regulation (EUDR) and stricter traceability requirements. As a result, future growth is expected to rely primarily on higher productivity, technological innovation and the more efficient use of existing agricultural land, rather than on expanding the agricultural frontier.
Beeld: © LAN Cono Sur
Why does it matter for the Netherlands?
The Netherlands is one of Argentina's largest trading partners and serves as the main European gateway for many Argentine agricultural products through the Port of Rotterdam.
For Dutch companies active in feed, food processing, logistics and commodity trading, the reform is less about increasing European import volumes than about strengthening Argentina's competitiveness as a supplier. While EU demand for agricultural commodities is largely determined by market needs, lower export taxes improve Argentina's price competitiveness relative to other major exporters such as Brazil, the United States and Ukraine. Combined with greater policy predictability, this could make Argentina an even more attractive and reliable origin for soybean meal, soybean oil, corn, wheat products and biodiesel.
The benefits extend beyond commodity trade. Higher farm profitability is expected to stimulate investment in technology, infrastructure and value-added processing, creating new opportunities for Dutch companies and knowledge institutions active in areas such as seeds, precision agriculture, water management, storage, logistics and sustainable farming solutions.
At the same time, competitiveness alone will not determine market access. As the EU Deforestation Regulation (EUDR) is implemented, European buyers will increasingly require robust traceability and proof of deforestation-free production. Argentina's ability to combine greater competitiveness with credible sustainability and certification systems will therefore be essential for maintaining and expanding its position in the European market.
A reform coinciding with a new trade environment
The timing of the reform is particularly remarkable. It coincides with a broader opening of the Argentine economy and with significant progress in the relationship between the European Union and Mercosur.
Following the political agreement reached in December 2024, the EU-Mercosur Agreement entered provisional application in 2026, creating a more predictable framework for trade and investment between the two regions. While export tax reform and the trade agreement are separate processes, together they point in the same direction: greater integration of Argentina into international markets and stronger incentives for export-oriented sectors. For European and Dutch businesses, this combination could open new opportunities across agricultural value chains.
Beeld: © Bolsa de Comercio de Rosario
Looking ahead
Whether export taxes ultimately disappear will depend on Argentina's ability to maintain fiscal discipline and macroeconomic stability over the coming years.
What is new , and significant, is that for the first time since 2002, Argentina has a published, legally formalised reduction schedule. Previous governments made announcements; this government has set a timetable. For farmers making planting decisions, for exporters registering forward sales, and for Dutch buyers managing multi-year supply contracts, that kind of predictability has a value of its own.
The most important development may not be the size of the tax cuts themselves, but the emergence of something Argentina has often lacked: predictability.
More information
Would you like to know more about the work done by the LVVN Office in Argentina? You can visit the country page of Argentina. You can also send an email to the LAN team in Buenos Aires: bue-lvvn@minbuza.nl.