Argentina’s agro-food sector is growing remarkably, but agriculture policies are not keeping pace

farm

(Noah Buscher, Unsplash)

This article is brought to you in association with OECD.


The Argentinian agro-food sector has grown remarkably over the past thirty years, driven by innovation, an abundance of young, well-educated farmers and strong international prices. While Argentina’s use of export taxes has raised much-needed revenue for the federal government, the policy has reduced gross farm revenues by an estimated 14% over the period of 2015-17, discouraging investment in one of the country’s most competitive sectors, according to a new report from the OECD.

The OECD Food and Agricultural Review: Agricultural Policies in Argentina finds that macroeconomic instability in Argentina has placed a heavy burden on the agro-food sector over much of the past two decades. Export taxes on important commodities continue restricting producer access to lucrative global markets while keeeping domestic prices low. Reforming the use of export taxes will be critical to the future development of the agro-food sector, according to the Review.

“Argentina is a major player in international agriculture markets today, with tremendous potential to increase productivity growth, on a sustainable basis,” said Ken Ash, OECD Director of Trade and Agriculture, during presentation of the Review with Argentina’s Minister of Agro-Industry Luis Miguel Etchevehere at the ExpoAgro event in San Nicolás, Argentina. “Future success depends on governments and industry working better together, both to ensure sustainable use of land, water and biodiversity resources, and to modernise the agricultural innovation system,” Mr Ash said.

The OECD Review says that today’s challenging macroeconomic environment makes it crucial for Argentina to find the right balance between the short-term need to raise government revenues and the long-term objective of phasing out export taxes. While environmental pressures are not as severe as in many countries, pressures are increasing and warrant early attention, as does further developing the sector outside the Pampras region, according to the Review.

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