The Economies of Argentina and Brazil
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The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.
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Chapter 4: The Agricultural Sector in Argentina

César Ciappa and Andrés Gallo


César Ciappa and Andrés Gallo 4.1 INTRODUCTION The agro-industrial chain (AIC) in Argentina has been historically one of the economy’s most efficient and competitive sectors. However, despite the fact that agricultural exports provide most of the foreign exchange for the economy, different governments have taxed agricultural producers since the mid twentieth century. Several studies (Krueger et al., 1991; Sturzenegger 1990, 1991; Valdés and Schaeffer, 1995; Sturzenegger and Salazni, 2007) describe the antiagricultural policy bias that strongly discriminated against primary producers. This taxation policy was characterized by extensive use of export taxes on farm products as well as quantitative restrictions on trade. These studies agree that the policies applied to the agro-industrial chain generate different conflicts among economic agents. On one hand, agro-industrial production must satisfy the increasing local and international food demand and, accordingly, government policies should promote increases in production. On the other hand, given the characteristic of ‘wage goods’ of most agricultural commodities, commodities’ prices will have, in the short run, an effect on real wages, poverty and indigence. As a result, this duality generates conflicts regarding economic policies for the sector. High food prices are an incentive to production, investment and the adoption of new technologies, but they have negative impact on the local real wages on net food consumers. In the short run, price control, through taxes and other policies, can positively affect workers’ incomes and poverty, but in the long run it will undermine companies’ ability to expand production inducing a further...

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