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Agricultural Policies in Argentina

image of Agricultural Policies in Argentina

The Food and Agriculture Reviews provide a comprehensive assessment of agricultural policies and calculate a set of policy indicators developed by the OECD. These indicators are regularly used in the analysis of the agriculture and food sector in OECD countries and several emerging economies. This review analyses both the indicators available for Argentina and the main agricultural policy areas, such as trade, innovation, sustainability, risk management and value chains. It also provides a series of policy recommendations.

Argentina’s agricultural sector has undergone a considerable innovation process over the last two decades. This transformation was mostly led by a dynamic and pro-active private sector often subject to policies providing negative support via export restrictions and taxes. The rapid adoption of technologies, such as improved varieties and no-till farming, and organisational innovations have contributed to increasing the Total Factor Productivity of crops. Government focus on providing such general services as research, extension, and animal and plant health has facilitated innovation as has the proactive management of risks by farmers. Nevertheless, environmental pressures are increasing with deforestation and the use of pesticides.

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Benchmarking agricultural policies: PSE results

Argentina’s policies have burdened the agro-food exporting sector for most of the last two decades. Producer support was estimated to have a negative value of -14% in 2015-17, showing the impact of these policies on farmers’ receipts. The %PSE was as low as -39% in 2008-10. This negative value is an outlier compared with most other countries covered by OECD monitoring and evaluation. The current administration eliminated all export taxes with the exception of those on soybean in 2016, and this has been reflected in the reduction in the absolute value of the negative PSE. Given that soybeans represent a big share of the value of production in Argentina, the PSE is likely to remain negative if the export taxes on soybean remain. The new temporary tax on all exports introduced in September 2018 is not yet reflected in the estimates of support. Direct payments to farmers are marginal. General services on Knowledge and Innovation and Inspection are significant. However, the Total Support Estimate (TSE) remains negative.

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