The tax pressure on the countryside increased and the State keeps almost two thirds of the producer’s income

Behind this jump a central factor appears: the conflict in the Middle East and the tensions in the Strait of Hormuz, a strategic route through which a key part of the global energy and fertilizer trade circulates.

This context strongly pushed up the price of urea (an essential input for production) and fuel, completely affecting agricultural profitability. This Monday, the Argentine Rural Society (SRA) indicated that this nitrogen fertilizer rose 42%, going from $530 to $750 per ton, and diesel oil increased by 22% between the end of February and the third week of March, going from $1,775 to $2,166 per liter.

“This edition is, more than ever, marked by the national and international situation: rise in costs such as fuel that impacts freight, provincial tax updates and low profitability,” explained Nicolle Pisani Claro, Chief Economist at FADA.

In concrete terms, the indicator shows that Of every $100 generated by a hectare, $62.5 goes to the payment of national, provincial and municipal taxes.

At the provincial level, the differences are marked: Entre Ríos leads with 67.6%, while Córdoba registers 60.2%, Buenos Aires, 60.4%, La Pampa, 60.4%, Santa Fe, 57%. and San Luis 55.7%.

The FADA Index (which is carried out every three months) had given 56.3% in December, a drop in relation to September (60%) due to the decrease in the permanent withholding rates implemented by the Government.

From FADA they explain that the increase in the index responds to a double dynamic. On the one hand, the increase in production costs reduces income. On the other hand, the update of taxes (common at the beginning of the year) increases the weight of taxes per hectare.

“This combo of rising costs, adjusted income and updating of provincial taxes generates a clear effect: although taxes do not change structurally, they weigh more on a lower income,” said Antonella Semadeni, an economist at FADA.

In this sense, Provincial and municipal taxes went from representing 6.4% of the total at the end of 2025 to almost 10% at the beginning of 2026. The rural real estate tax showed average increases of 79% nationwide, while municipal rates increased around 32%.

The analysis by crop reveals a generalized drop in profitability, although with disparate situations. In soybeans, the State participates with 61.6% of the income; in corn, with 56.8%; and in sunflower, the indicator shoots up to 80.3%.

However, the most critical case is that of wheat, where state participation reaches 104.4%.

“This means that the tax burden is greater than the income generated, that is, the economic result is not even enough to cover the taxes,” warned Fiorella Savarino.

This scenario places the cereal in a delicate situation, highly conditioned by the increase in costs and its strong dependence on fertilization.

One of the main drivers of this deterioration is the increase in the price of ureawhose price rose 43% since December and 39% year-on-year. The conflict in the Strait of Hormuz—through which nearly 20% of the world’s oil, 25% of gas and 50% of urea circulates—generated tensions in international markets.

This increase directly impacts crops such as wheat and corn, which are intensive in the use of fertilizers.

Added to the increase in inputs are other factors that put pressure on costs. lAgricultural work increased 33% since December, well above the estimated inflation for the period (8.6%), evidencing a strong gap.

Freight also registered increasesdriven by fuel: 8.4% in pesos and 12% in dollars. This especially affects the regions furthest from ports, where logistics has a greater impact.

“All this sets up a scenario in which producing requires more and more resources, reducing the producer’s margins,” said Luz Silvetti.

In turn, the input-output relationship deteriorated: Today you need 3.9 tons of corn or 3.8 tons of wheat to buy one ton of ureaa less favorable equation than that of a year ago.