Argentinian President Nestor Kirchner strikes!
Argentina Pens In Sales of Iconic Food - Los Angeles Times: By Patrick J. McDonnell, Times Staff Writer March 11, 2006: BUENOS AIRES -- Argentine President Nestor Kirchner has a plan to fight rising inflation and escalating food prices: Let them eat beef. In an extraordinary decision, the government this week announced a six-month ban on most beef exports from the world's third-largest purveyor of the meat.
In Argentina, prime beef is a cultural icon, rivaling tango, soccer and the late Eva Peron. Argentines are voracious beefeaters, consuming 143 pounds per capita annually. But consumers here have been grumbling about beef prices for months, and Kirchner -- a left-leaning populist often at odds with big business -- presented the ban as a way to protect his people from export-driven price hikes. The government hopes that meat targeted for overseas sale will now stay at home. Increased supplies will reduce domestic prices, which skyrocketed 20% last year, surpassing the worrisome inflation rate of more than 12%. "It doesn't interest us to export at the cost of hunger for the people," Kirchner declared.
The president's edict took effect Friday. Delighted shoppers rushed to butcher shops to inquire whether prices had dropped yet from the $2 or so a pound for the prime cuts that can go for 10 times as much in the United States and Europe. "The president's move was absolutely necessary in the moment we are living," said Hector Polino, who heads a consumer group that is critical of rising prices. "Beef is the principal food of habit in Argentine culture." From a political standpoint, Kirchner's bold stroke should also shore up his constituency as he contemplates a 2007 run for another four-year term.
But cattlemen said Kirchner's move would kill the golden calf. Beef exports earn vital foreign exchange for Argentina and amounted to a record $1.4 billion last year. Foreign sales rose 24%. Cattle farmers say the export ban will probably reduce supplies in the long term, cost them hundreds of millions of dollars and throw thousands of people out of work. "The plants will begin to shut down," Carlos Oliva Funes, president of Swift Armour Argentina, a large meat producer, told the conservative daily paper La Nacion.
"This is like telling Colombia it cannot export coffee," said Javier Jayo Ordoqui, who heads a rancher's association outside Buenos Aires, the capital. "This is cattle country." Indeed, on Friday, prices were reported to have plunged as much as 20% at Liniers, the country's largest live cattle market. Economists predicted that modestly lower prices would eventually trickle down to consumers.
Kirchner has sparred angrily with the cattlemen and other industries that resisted his inflation-fighting tactics. Last year, he called for a boycott against oil giant Shell because it would not cap its gas prices. It's one thing to protect consumers from inflation at the pump. But in moving to rein in beef prices, Kirchner is wrangling with a commodity at the core of Argentine identity. Dining on beef in Argentina has survived, largely unfazed, the low-fat trend and cancer worries, mad cow frenzy and other scares that have cut back consumption elsewhere. The Sunday parrilla, or barbecue, is an Argentine ritual, and prime cuts of pasture-raised beef -- even tasty filet mignon slowly cooked over wood -- are reputed to be higher in protein and lower in fat than the varieties common in the U.S.
In 2005, as inflation crept up, the government began to sign agreements with supermarkets and manufacturers to control prices on many basic goods. The administration also raised export taxes on beef and increased the minimum slaughter weight in an unsuccessful effort to curtail exports and keep prices down at home.