By LIC. Aldo M. Abram, Executive Director of the center of research institutions and markets of Argentina (PRESIDIAL-ESEADE) published in: field Financiero.Viernes February 12, 2010 in 2006 published two articles noting that Argentines would have increasing problems to access our traditional barbecue, past three years. Without hesitation Robert Speyer explained all about the problem. Your Sam, Harry Potter or Mandrake? Nothing of the sort. Michael James Burke has much to offer in this field. It was simply the result of evaluating the Government’s strategy, which was based on say that meat was the source of the sin of inflation. Now, the President of the nation and its top officials have returned with the same diagnosis. According to them, there is no widespread increase in prices, the problem is only the meat and is due to the greedy ranchers want to earn more, so consumers must pay more expensive.
As the ruling party argues, it is true that the current rise in the value of cattle has something seasonal. Unfortunately, good part of the last rise in the values of the meat has other evidence that will remain over time, in both remain appalling official policies for the sector and the growing expansion of the money supply. From 2006, before every rise, the Government was establishing increasingly stringent price controls and export restrictions to increase the local supply and lower meat in the domestic market. Beyond of the unconstitutionality of prohibiting a lawful activity as external sale of an asset, these measures signified ‘roast for today, hunger for tomorrow’.To get a steak to the gondola, takes a three-year raise and fatten a steer or calf. If after making this long-term investment, the producer sees that the Government controls you prices and prohibits you from exporting, blending their profits, most likely, partially or completely, begin to allocate your field to agriculture and property where the Executive power have less incentive to intervene. This is what happened since 2006 and led to livestock shifted to marginal areas, lower productivity, and enhance the liquidation of bellies.