Wednesday, March 26, 2008

No steak in BA? Is that like no Guinness in Dublin?

Warning: I have no idea what I am talking about, but the following sums up what I think/feel/have heard

So in Argentina all the farmers are protesting the new tax rates. And by protesting, I mean blocking all the major highways, picketing in the city, and refusing to butcher their cattle, pigs, and chickens. I believe they are only delivering the fruits and vegetables that they would lose if they didn’t sell. So Ana just called me after going to the grocery store and told me that basically there is no meat in the grocery stores now. (Which is sort of like saying there are no more cars in Detroit, or gas in Saudi Arabia).

So I am no expert, but my understanding is the following:

The gov’t has serious price controls on food to ensure it is affordable and doesn’t cause runaway inflation. They also limit the amount of exports on certain foods, such as beef, which are more expensive if you were to sell it abroad. (I heard that there are similar issues affecting the US agriculture markets where it’s more profitable now to export basic foods than to sell it in the US). Historically, the land-owning farmers have been the richest and most economically successful, but they get a lot of help when the weather doesn’t help. So the government passed a moderate tax hike on the farmers and are holding a tough line on the price controls, and naturally the farmers don’t like it. I heard one story that you have all these farmers riding brand new John Deere tractors protesting the tax increases – the story concluded that if they have money to buy brand new John Deere tractors, why are they upset about higher taxes? Not the best logic in the world, but I see his point.

Anyway, if what I understand is true, it is a pretty interesting case where the rich land-owners are brilliantly playing to the popular support and the President is not really doing herself any favors. Meanwhile, I cannot eat steak tonight. In a country with more cows than people, I can’t get a steak.

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