Congresos y reuniones científicas
Poverty impacts of changes in the price of agricultural commodities Recent evidence from Argentina
Congreso; XI Arnoldshain Seminar; 2013
Institución organizadora:
Institute of Development Policy and Management. University of Antwerp / International Society for Comparative Economic Studies
The increase in the price of agricultural commodities benefited greatly to Argentina, especially in a period when the country was almost completely excluded (forcibly and/or voluntarily) frominternational financial markets. On the other hand, with a large share of the population with low and medium-low incomes, the increase in agricultural commodities prices has the potential to hurt an important part of the population through a raise in the price of goods that explain an important share of households expenditures, especially those that constitute the food-basket. The evidence shows that this has been the case. A less obvious channel works through changes in factor incomes. In the case of labor income, this effect was more beneficial to the middle income households. As a response to the increase in the price of agricultural commodities, and also the important devaluation that the local currency experienced in the year 2002, the government imposed very high export duties. Our simulations shows that this measure has limited  effectiveness, especially considering the incentive distortions it introduces to the whole economy. Finally, an elimination of the VAT on the consumption of food and beverages would be large enough to compensate for most of the negative effects derived from the increase in the world price of agricultural commodities and the potential elimination of export duties.