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Argentina to provide debt relief to drought-hit farmers

BUENOS AIRES, March 13 (Reuters) - Argentine President
Mauricio Macri said the government would provide some debt
relief to farmers struggling through what he described as the
country's worst drought in 40 years, which has resulted in
dramatic cuts to soybean and corn crop outlooks.

Four months of dryness in the world's No. 3 exporter of both
crops, as well as the top supplier of soy-based livestock feed,
have reduced estimates for the soy harvest to below 45 million
tonnes, compared with expectations earlier in the season around
55 million tonnes.

Macri said the central bank will soon publish a resolution
delaying maturities on farm loans to prevent producers from
falling into arrears, while the state-run Banco de la Nacion
will launch new credit lines with generous grace periods to
allow farmers to continue purchasing agricultural equipment.

"This way, we will allow you to obtain new loans to get
through this difficult moment," Macri said in a speech at a farm
equipment convention in San Nicolas, a city in Buenos Aires
province in the heart of the South American country's Pampas
grains belt.

Farming is crucial to Argentina's economy and the smaller
crop is expected to reduce growth. The economy will likely
expand for a second straight year after a biting recession in
2016.

The drought has prompted spikes in corn and soy futures
prices on the Chicago Board of Trade.

The measure would apply to farmers with loans from both
public and private banks who qualify under Argentina's
agricultural emergencies law, and will be approved at the
central bank's next board meeting, a central bank spokesman
said.

It would extend by 45 days the period of time farmers have
to pay before falling into a lower class of debtor, which would
limit their ability to get loans. The government had previously
extended such relief to farmers who had suffered from floods,
the spokesman said.
(Reporting by Luc Cohen
Editing by Nick Zieminski)

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