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The Domestic Impact of Export Restrictions:  The Case of Argentina

 

The world is experiencing a period of high food prices, which is estimated to have increased poverty by around 100 million people (Zoellick 2008).  Among the factors aggravating the problem are export controls being imposed by some food exporting countries on major food exports. Export controls can take the form of quantitative restrictions and embargoes or price-based restrictions in the form of export taxes. Such controls are undertaken in order to mitigate the impact on domestic prices, but by reducing international supply, they have been shown to actually exacerbate the increase of international prices. Much attention has been given to the detrimental impact such controls can have on world prices.  The question of whether these policies meet their stated domestic objectives, namely of mitigating food prices and poverty in the policy-implementing countries, has received less attention and is the subject of this paper. Since Argentina is a country with a long record of substantial export taxes and quantitative restrictions on food exports, it is a good case study from which lessons could be drawn.

 

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