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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The context of Argentinian agriculture

Argentina is an upper-middle income country well-endowed with natural resources and human capital. Its history of macroeconomic instability and volatility in policy orientations from open markets to import substitution has led to overall poor long-term economic performance. The main exception has been the agricultural sector which, despite policy impediments, has innovated and grown over the last two decades. Driven by higher international agricultural prices, Argentinian agriculture – in particular, in the extended Pampas region – has experienced a major structural transformation in production and productivity, in on-farm practices and technologies, and in its institutions and contractual arrangements. This has been reflected in large changes in the use of land and the portfolio of commodities in favour of soybean, and in the composition and destination of exports towards Asia. However, other agricultural production lags behind – notably that in regional economies (outside of the Pampas), including tobacco, cotton and fruits and vegetables.

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