Argentina's Food Crisis has International Consequences

Summary

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WASHINGTON -- We tend to judge this year's food crisis, marked by seemingly indomitable prices, from the point of view of those who are suffering. It might be useful to judge the crisis also from the point of view of those who are causing it. That's where the real lessons will be learned.

Let's take Argentina, one of the world's top producers of grains and soybeans. Agriculture, both traditional and industrial, employs a third of the country's work force and accounts for half of its exports. Three months ago, President Cristina Fernandez de Kirchner declared war on the countryside by raising taxes on farm exports. The decision took an already alarming tendency to new heights -- both her government and that of her husband, Nestor Kirchner, whom she succeeded, have squeezed farmers in order to maintain a political machine based on patronage and wealth redistribution under a populist state.

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Extract

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Argentina's Food Crisis has International Consequences

This time, the Buenos Aires government decreed that export taxes would shadow price fluctuations on the world market, in practice raising them to 45 percent of farmers' revenues. If ...

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