Extract: Argentina's new Government intends to spur agricultural growth, particularly in the grain and oilseed sectors, during the eighties by expanding farmland, increasing productivity, and improving transportation and storage facilities. Because Argentina's farm sector recovery will likely be slow and difficult, the United States will probably lose few farm export customers to that country during the eighties. To ease the financial burden on farmers, the Argentine Government must maintain political stability, blunt inflation, reduce the national debt, and develop successful farm policy programs.

This report analyzes agricultural policy in Argentina, in particular with respect to the degree of support producers and consumers receive. Available evidence suggests that: (i) as a result of export taxes, in most periods, domestic agricultural output prices have been lower than international prices; (ii) despite the previous finding, Argentine agriculture has shown a remarkable capacity for productivity and output growth; and (iii) since the 2016 crop year, significant changes in the agricultural policy environment have taken place. The analysis of available data also shows that significant changes are occurring in aspects such as farm size and in the linkages between production, input supply, and the output processing sector. The report also analyzes the support the public sector provided to producers in the form of funding for agricultural research, infrastructure, and other “public good” type of investments.

Recent increases in international competitiveness by Argentine and Brazilian grain and oilseed producers could foreshadow continued gains on the strength of abundant undeveloped agricultural resources, increasing market orientation, and expanding global trade liberalization. Economic and policy reform coupled with agricultural research developments drove the dramatic growth surge of the 1990s. Infrastructure development, livestock sector dynamics, and macroeconomic stability in each country will determine the speed and intensity of further growth.

The noted economist Yair Mundlak presents here a theory of the growth of the agricultural sector within the context of a growing economy. He explores the various aspects of the dynamics of agriculture and their relationship to the dynamics of the economy at large, offering a unique blend of theory, methodology, and empirical analysis. The rate of agricultural growth has varied across countries and over time, even though the main innovations in agricultural technology have been made available to all countries. Consequently, the difference in performance is due to the use made of the available technology. Mundlak treats the implementation of technology as an economic decision similar to decisions about resource supply and allocation. The development of agriculture, like that of other sectors, is determined to a large degree by the economic environment, especially public policies. This framework permits the author to evaluate the effects of policies on growth by examining their effects on sectoral incentives. Mundlak shows that neutral macroeconomic policies may have a stronger effect on sectoral growth than sector-specific policies. The book contains problem sets, and will be a reference and text for graduate-level courses.

The purpose of this study is to review the factors affecting the production and marketing of oilseeds and products in Argentina in order to measure the future competition or market for U.S. exports of these commodities. Much of the material presented in this report was gathered during visits to Argentina in 1970 and 1971 by representatives of the Foreign Competition Branch. This study is one of a series expected to be published on this subject.