Killing the Pampas's Golden Calf

I. Title: Killing the Pampas's Golden Calf, Source: The Economist, Date: March 27Th, URL: http://www.economist.com/opinion/displaystory.cfm?story_id=10925509






II. Summary:



For at least the past 70 years, the Argentinian farmers and their exports (beef, soybeans, wheat, etc;) have been taken advantage of by their government. The Argentinian president, Cristina Fernandez de Kirchner (as well as other governments around the world) increased taxes or quotas on agricultural exports. The reason for this is that some staple foods have recently been in short supply and governments hope that this will stop prices from rising at home. Fernandez thinks the farmers should share their windfall with the rest of the country. Due to the punitive rise in export taxing, Argentinian farmers have been protesting by blocking roads. In 2002 export taxes were introduced in Argentina at 20% due to financial collapse and overall, the taxes helped stabilize the economy. Now even though Argentina is more economically stable than it was in 2002, taxes were raised to a whopping 40%. This recent increase (and 6-month ban of beef exports to encourage the growing of crops) are very likely to cause a decrease in farm output and if prices (of wheat, soybeans, etc;) decrease, the farmers will even be in worse shape.







III. Reactions:

• This article relates to the theme of creation, expansion and interaction of economic systems. This is because it focuses on agriculture, trade and commerce in Argentina.



• The historical background of this issue is that for at least the past 70 years, Argentina has abused and taken advantage of their farmers. In 2002, 20% taxes on export successfully stabilized Argentina's economy, but have recently been unnecessary raised to 40%. It is now to the point that eventually the Argentinian government's actions will most likely result a balance-of-payments crisis.



• The author's point of view is that of a British outsider (unaware of gender).



• The author's point of view could possibly be impacting how the issue is being reported. This is because the author is an outsider and he may not be able to put himself in the Argentinian government's shoes or know why the taxes were increased 20%. The author may also be in favor of the farmers because if export taxes are decreased, staple food prices in Britain may go down (if Britain is one of the countries Argentina's farmers export their crops, etc; to).



• The point of view of the Argentinian government is missing. The article doesn't give the government's excuse for increasing the export taxes to a whopping 40%. This information would help in that it would give me a better understanding of why taxes were increased so dramatically.



• My own reaction is that the farmers are right to protest. For the past 70 years, the farmers and their exports have rescued the economy and now see themselves being taken advantage of.