Thursday, April 3, 2008
Contrasting Agricultural Policies: Cry for the Argentine Farmers
Although, it probably is not getting a lot of press the US farm bill is currently being debated in the Senate. As I see it the main debates are how much subsidies to give out and who should get them. In particular, farmers of food stuff crops like corn, wheat, and soybeans get subsidies while growers of fruit do not. Take this NY Times OP Ed from a Minnesotan farmer, where the farmer complains that he cannot afford land prices because they are inflated by grain growers getting subsidies. Another point of contention is that most payments go to large farmers, highlighted here by the USDA. So in the US we are debating how much to pay farmers.
In Argentina, the debate is over how much in taxes to charge exporting farmers. As this LA Times article details strikes by farmers over a tax increase on Soy Bean exports. The strikes have led to food shortages, although farmers are currently taking a break from their strike because of this.
So why would Argentina place high taxes on their farm exports. The government needs money and it is difficult to collect taxes from individuals, but exports are easier to tax if they must go through major ports they are easier to verify.