Sunday, November 17, 2013

Agriculture of Argentina

Argentina's wealth has

traditionally come from ranching and grain growing, and agricultural commodities continue to be a mainstay of Argentine exports. A bright spot for the economy in 2006 was the agricultural sector.
In the first part of this decade many agricultural producers saw commodity prices fall while the cost of their inputs rose. They also contended with scarce credit and high export taxes. Of late this situation has improved fairly dramatically. In August, 1997 Argentina also for the first time in 67 years exported a shipment of beef to the United States.(The country was declared free of foot and mouth disease in May.) The government hopes to export as much as one million tons of beef a year by the year 2000, and beef producers are looking at this as an important conduit to the lucrative markets of Asia and Japan.
Argentina’s soybean crushing capacity more than doubled during 2005 - 2006 years helping solidify Argentina as the world’s leading exporter of soybean meal and soybean oil. Argentina produces 18 percent of the world’s soybeans but accounts for 46 percent of the world’s soybean meal exports and 55 percent of the world’s soybean oil exports.
What are the factors behind Argentina’s strength in exporting soy products? A few factors include small internal consumption of soy products, new efficient soy processing facilities, and a competitive currency exchange rate - but a primary driver in the continued expansion of Argentina soy exports is a Differential Export Tax (DET) that financially favors the export of processed soy products over whole soybeans.