ARGENTINA AGRICULTURE: THE DEVELOPING CRISIS
Issue Date
2014-12-31Author
Horrell, Carl Michael
Publisher
University of Kansas
Format
73 pages
Type
Thesis
Degree Level
M.A.
Discipline
Global and International Studies, Center for
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Copyright held by the author.
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The government of Argentina has put in place extractive political and institutional processes that have been ripe for rent seeking activity and that have supported the interests of urban elites, voters, and populist politicians to the detriment of rural and export-oriented agricultural interests. However, it is unclear how these policies influence growth in agricultural markets. The global population is projected to grow to nine billion by 2050 and will severely test our abilities if we do not understand how to put in place the most efficient and productive political-economic systems to promote the most efficient production of food, fiber, and fuel. Nature has blessed few countries in the world as it has Argentina with fertile land and climate and few have been governed as badly as the populist Argentine governments have over the past 70 years as it has systematically plundered the Pampas and its exports to placate their urban constituencies and prop up their failing economic policies. I will examine Argentine agriculture with an analysis of long-run historical data and comparing the data for crop production systems (Corn, Soy, and Wheat) against data that demonstrates aggressive and extractive trade policies. Isolating for these extractive taxation policies and programs should provide opportunities for comparison and allow better understanding of the effects that rules and governance have had on agricultural production in Argentina. The data suggest that Argentine agricultural output, much of which is exported, has been negatively impacted by the trade and tax policies pursued by the Argentina governments since 2003. Since export profitability is hampered (and potentially eliminated) by high import taxes, export taxes, and an overvalued exchange rate, the farmers / producers have made decisions on crop production. Producer investment in efficient production methods has been lower than it could have been. In addition, there has been a dramatic change in the mix of crops produced that could lead to future food shortages in the urban centers.
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