1. A summary of the agricultural industry in Argentina, Canada and their differences
With a solid base of natural resources, the agricultural sector is one of the cornerstones of economic activity in Argentina, as one of the main countries possessing the highest quantity of farmable land. In 2004, agriculture accounted for 11% of the nation’s GDP and 57% of total merchandise exports. Argentine producers have applied global technological advances to their agricultural operations to optimize output. With use of farming technology, Argentina is one of the main exporters of soy, wheat, corn, and fruits. Main trading partners are the European Union, such as Spain, the Netherlands, Italy, Germany and France, as well as Asian countries such as China.
The country has a fairly educated labor force, and a large market size but the ...view middle of the document...
There is also no protection from the government, where like North America or Europe have import barriers or subsidies or price supports. Rather, the Argentine government applied export taxes on grains, and saw it as a mere source of tax revenue.
The agricultural sector Canada faces similar healing and in-progress stages of political support for the industry as well. Canada’s biggest grain crops are wheat (historically the sixth largest wheat producer and one of the top exporters), barley and corn. The Canadian Wheat Board has sole marketing authority for the wheat and barley productions of grain farmers of western Canada, for both export and domestic human consumption. Though the government tried to liberalize the barley trade since 2006, strong opposition and resistance did not allow its efforts to bear fruit. The absence of the monopoly would be beneficial to all grain farmers of western Canada, and in March 2008 a government-run poll proved this view with a 62% response indicating their hopes for liberalized trade. In practice, however, with political tensions surrounding the issue especially with elections, this will be a slow process.
Both Argentina and Canada have a history of being a big player in the agricultural sector, but several factors differ vastly that distinguish the two. As one of the most developed nations in the world, Canada operates in a world with great institutions, infrastructure, human resources, and innovation as well, whereas Argentina is rather limited in all those areas. This is not to say Argentina is heavily disadvantaged, however. Argentina has a competitive edge in terms of cost efficient productions. With technological advances the cost of transportation and marketing are falling which in turn make Argentine crops increasingly competitive. Both countries each have their strengths, weaknesses, opportunities and threats (Appendix B and C)