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War in Ukraine leads Argentina to resume protectionist manual

War in Ukraine leads Argentina to resume protectionist manual

Argentina, a world agricultural power, is again meddling in export markets as the Russian invasion of Ukraine fuels food inflation, providing the perfect excuse to revive protectionist tendencies.

The ruling coalition that took power in 2019 is packed with officials who support intervention in crop and beef markets to secure supplies and lower prices for Argentines, 41% of whom live below the poverty threshold.

Angry farmers and a more market-oriented wing of government had largely kept the interventions in check. But since the war in the region of Black Seathe main producer of crops, put the world markets in check, protectionist policymakers in Argentina They have charged.

If a decade of controls under previous governments, led by the current vice president Cristina Fernandez de Kirchner and her late husband, serves as an indicator, blocking exports and imposing price caps risk reducing Argentina’s output of wheat, corn and beef and aggravating global food tensions.

According Lucas Romerodirector of the political research firm Synopsis Consultants on Buenos Airesis Management there has been a constant debate between being something new and more rational or being a continuation of the populist period of 2003-2015. But he warns that results are needed on the inflation front to survive, and now he has the war as a justification for being protectionist.

Argentina is a top beef exporter, but having cheap ribs to grill at home is also considered a birthright by local carnivores, making that market particularly susceptible to government intervention.

Rising global feed costs are one of the obstacles to keeping beef prices in check, but the South American nation has another problem: a recent drought in the agricultural belt of The Pampasubsequently aggravated by forest fires in the north, threatens to reduce their herd of cattle and, in turn, supplies to slaughterhouses.

“I made this decision in the context of the war that prompted global increases in food prices, a situation that adds to the crisis that our livestock is going through”said the Minister of Agriculture, Julian Dominguezthis week in Twitter about the threat to ban exports.

To be sure, other governments are also trying to shield voters from the full brunt of global inflation. in the neighbor BrazilPresident Jair Bolsonaro has been fighting against rising fuel prices. And in EuropeSerbia banned crop exports.

This is not a problem exclusive to Argentina, according to Serge Berenszteinwho runs a political consultancy in Buenos Aires. In his opinion, the problem is more generalized, but in Argentina, the government tries to hide the difficult economic adjustments behind a nationalist discourse.

Source: Gestion

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