March 13, 2006
Argentine farmers see red over beef export ban
Argentine farmers are protesting a government decision to ban beef exports for 180 days, saying the ban will affect future exports and force supplies to be reduced.
Javier Martinez del Valle, director of the Argentine Association of Producers and Exporters said it was a totally disproportionate response to the problem of inflation in the country. Despite increased tax on beef exports from 5 percent to 15 percent four months ago, beef prices have leapt twice as fast as other consumer items, leading the government to impose the ban. Beef prices in Argentina last year rose 29 percent.
However, farmers say the government will be shooting itself in the foot; the ban will damage the credibility of Argentine producers and it will be very difficult for them to recover the confidence of its former markets, Martinez said.
Beef exports may fall by about US$1 billion this year because of the ban, and the market may lose one third of last year's levels, causing 30,000 people to lose their jobs, said Mario Ravettino, executive director of the Argentine Beef Consortium, a company that handles 80 percent of the country's total beef exports.
The value of beef exports last year saw a 40 percent jump over 2004 to US$1.4 billion. On the other hand, domestic beef demand has dropped to 60 kg per capita from 100 kg in 1980 because of rising prices, according to the country's agriculture secretariat.
The aim of the ban was to direct about 600,000 tonnes of beef destined for export to domestic markets so that prices will come down. Farmers, however said that supplies may be cut due to an outbreak of foot-and-mouth disease in cattle.
The annual inflation rate doubled to 12.3 percent last year from 6.1 percent in 2004.
Beef is such an important dietary staple in Argentina that locals spend more on beef consumption than anything else in their household budget. Beef purchases makes up 4.5 percent of the national consumer price index (CPI) while in the US, it only took up 0.64 percent of the CPI.
