Argentina’s Agricultural Reforms: Impacts on Agricultural Growth and Trade

In 2015, Argentina entered a process of sweeping transformation of its economic policies which provides for the recovery of agricultural growth and trade. The new policies center on the elimination and/or removal of exports taxes on the country’s principal agricultural commodities (soybeans, corn, wheat, and beef), macroeconomic stabilization, deregulation, and related market-oriented policies. These reforms represent a reversal of trade protection, managed exchange rates, and capital controls policies that have hobbled the farm sector for the past 15 years. Overall, the Argentine economic reforms imply the return to global markets of a once important producer and trader of soybean and products, corn, wheat, and beef. A better understanding of the potential impact of Argentina’s reforms on its food and agriculture sectors could provide an indication of the country’s future competitiveness. To evaluate the impact of these new developments and associated challenges on Argentina’s agricultural sector, we use a dynamic global general equilibrium model to explore the effects of the removal of export taxes and devaluation of the Argentine Peso, with a particular focus on trade and sectoral impacts.