At the Irish Farmers Journal Navigating Global Trade conferences in Belfast and Dublin last week, experts debated how the big issues of the moment might impact on Irish agriculture.

Brexit is the highest profile event but the upcoming CAP review will also shape farming after 2020 in the EU while Northern Ireland will have its own made in Whitehall farm policy. There is also several trade deals between the EU and other independent third countries at an advanced stage of negotiation.

While these events are imminent, they remain in the future and therefore their impact hasn’t yet been felt with the exception of the Brexit vote, which caused sterling to lose 20% of its value in a 12-month period. To find an excellent example of just how political decisions can impact an entire industry, we need to consider Argentina.

Argentina

As recently as 2005, Argentina was the third largest beef exporter in the world, selling 750,000t outside its own market. However the then socialist government, in a bid to control food inflation, imposed an initial six-month total beef export ban and thereafter made beef exports subject to a 15% export tax. This had the effect of decimating Argentinian beef exports. Sales collapsed and in 2015 they were less than a sixth of a decade earlier at 130,000t.

Reversal of policy

The election of a new market oriented President in 2015 led to an immediate reversal of policy and the export tax was removed. Of course beef production has a long lead in with herd rebuilding also restricting supplies for processing and export. However, even with this, exports were up almost 18% for 2016 to just under 157,000.

Argentina is on its way back to being a major global exporter again

President Marci has also taken further steps to encourage exports with the introduction of export refunds of 4% on chilled beef, 3.5% on frozen and these levels are due to be increased by a further 1.8%. Where exporters used to pay a tax of 15% to export, they will now be receiving a refund of almost 6%.

This means Argentina is on its way back to being a major global exporter again. They are also big drivers of the Mercosur group pushing for a free trade agreement with the EU. In this the next round of discussions are scheduled for March.

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