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Fruit sector in Argentina can't compete due to cost of production

Staff writer |
The underlying problem of the crisis in the fruit sector in Argentina was that they couldn't compete with other producing countries as production costs, when measured in dollars and compared to competing countries, were much higher.

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Alberto Diomedi, the Secretary of Fruit Production, said that, as of April 30 they had a of $400 million dollars deficit because they hadn't been able to send 300,000 tons of fruit Class 2 and 3, which is not the best, nor 200,000 tons of Class 1 fruit to Europe, and because Brazil hasn't been importing apples and pears for more than a month.

He confirmed that he was going present a document explaining the problem to President Cristina Fernandez de Kirchner and that he would ask her to "give us a hand through these asymmetries in the markets that can't be solved from the region." He also said they were not requesting a devaluation of the currency, but improving costs by giving producers a differential value of fuel and lowering payroll taxes, at least.

Diomedi said "we are not only concerned, we're also working hard to look for a north for the fruit growing sector, we've exhausted all instances and tried everything to improve things for producers."

He said that it was obvious that this wasn't enough because it was impossible to cover the sector's one billion dollars deficit with the state's finite budget, which is what the sector generates in a year "with jobs, supplies, transportation, contributions, fuel, etc."

He also said the production cost didn't allow the region to compete at the international level because the competing countries had devalued their currencies and were able to reach markets better.

"Measured in dollars, we can't compete. Other countries sell to Russia to $14, and we can't even cover our costs by selling at $17. "

He said: "I'm not talking about devaluation, I'm saying we should look at our costs and based on that take appropriate action to make us competitive once again." He exemplified this by saying the activity required a differential value of fuel or by lowering the high value of employer contributions, which are much higher than in Chile.

He also said that, "a truck from Alto Valle to Brazil is more expensive than a container from Europe to Brazil." He noted that, out of the 47 regional economies, the Upper Valley's fruit growing sector was among the top 10 most important ones.

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