A dynamic analysis of the impacts of export taxes: The case of Argentinean soy and beef markets

Stephen Devadoss, Jeff Luckstead and William Ridley

The World Economy, 2019, vol. 42, issue 8, 2427-2451

Abstract: Argentina plays an important role in the global soy market as one of the world's leading exporters of soy products. In an effort to shift its agricultural sector's focus to value‐added exports and to raise revenue, Argentina's government has maintained a regime of differential export taxes on soy products. In addition to soy products, Argentina is a major producer, consumer and exporter of beef. However, over the last decade it has relinquished much of its world market share as its beef exports have fallen because the government has periodically imposed a ban on exports of beef along with maintaining an export tax. As the soy and livestock sectors are inextricably linked, owing to both industries’ intensive land use and the utilisation of soymeal as a feed supplement for cattle, trade policies in one sector have pronounced cross‐sectoral impacts. This study develops a theoretical model of these different sectors and trade policies, incorporating the dynamic decisions of cattle stock management. The model is calibrated to real‐world data on the Argentinean economy, and the impacts of trade liberalisation are quantified. Key results show modelling the various intersectoral linkages and the dynamic implications of cattle stock is essential for obtaining accurate estimates.

Date: 2019
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