Good God! That is, as you say, the most ludicrous thing to do. Short Argentine bonds now might be a good idea.

Yup. No kidding. One of the memorable things about Netherlands are all the 'Argentinian Steak' houses you see all over the place. I've seen them in France, Germany, and the Nordic countries also. So I wonder what they will do? Change their name? And if they do that and go to supplies of beef from other sources, will they ever return to buying from Argentina?

Probably they will, but as a commodity supplier - not a brand name as heretofore. In the long term this will hurt Argentina pretty badly.

Argentina has a particular talent for self sabotage.

Let's assume for a second that this is not being done to reduce beef costs for his countrymen.

Let's assume for a moment that raising cattle for hamburger is being incredibly harmful to their natural environment in ways that cannot be easily recovered. But that selling that cattle for hamburger is in fact the "best" use of their resources in the Ricardian comparative advantage sense.

What would be the best way for a country to wean themselves off of cattle sales?

Jerry:

Perhaps you should look at an atlas. You will then, no doubt, discover that Argentina is not Brazil. I'm sure you'll be amazed to discover that cattle farming is not harming the Argentinean prairies "in ways that cannot be easily recovered".

I'd add something witty about the connection between "environmentalist" and "preternatural stupidity", but that would be crass and unbecoming.

Meanwhile, I await your post about the damage soybeans are doing to the Nebraskan rainforests.

Jerry,

The externalities of raising cattle need to be internalised by taxing pollution in some way -- then people will find ways to raise cattle which doesn't pollute so much, and won't just substitute some other equally polluting agriculture.

Barry, the question wasn't about Argentina, the question was about how economists would view a country moving away from what would apparently be a Ricardian comparative advantaged race to the bottom. If you wish, substitute Nebraska and soybeans for Argentina and beef.

Tom, so I agree with you, you need to tax the pollution in some way. How would Dan Drezner and other economists view Argentina or taxing all beef sales to mediate the pollution, especially in a world where Brazil, or the Duchy of Grand Fenwick might choose not to tax their beef products in the same manner.

What is Argentina and its peoples to do?

How long will it be before the marginal ranches start closing? Does anyone think that in a few years hence, domestic Argentine beef won't sell for more than before this wacky policy?

chsw

Argentina has a grass based cattle production system. If ranchers can afford to hold rather than sell (which they can), Kirchner has a problem.

Exports fall, Argentine currency falls, inflation increases, interest rates increase, export value per beast increases, cattlemen make money ie win, Kirchner loses.

Australian cattlemen & those associated with the Oz beef industry e.g. myself, win. That's the most important part. Onya Kirchner!

I don't think Kirchner's action is as stupid as the Dubai Ports deal. Watch for US Longshoremen being laid off.

...not sure of the timing here, but would this have anything to do with the recent confirmation of foot-and-mouth disease in Argentine (in which case exports would be suspended anyway)?

That is stupid, but South Africa is trying to rival it. I ve been following a story in the daily telegraph covering pending legislation banning foreign ownership of residential property as a way of combating local being priced out of the booming property market! Which is worse?

Black market in beef?

Jerry: They can become rich through trade and then afford to not pollute, of course.

Echoing Mr. Knox above - is this some kind of OPEC-type ploy to raise world prices, after which the Argentinians will attempt to cash in? Seems all non-Argentinian producers will prosper from this...

Jerry:

If this policy is being introduced for environmental reasons, it would make more sense to tax exactly whatever is causing the environmental damage (I am having trouble coming up with a scenario in which only cattle farming is environmentally damaging). Just reducing prices paid for cattle harms anyone who has figured out a non-environmentally-damaging way to raise cattle, and raises the serious risk that farmers will simply substitute to some other environmentally-damaging way of making money.

In the unlikely event that it is only cattle farming that causes the environmental damage, and there is no way in which they can be farmed environmentally safely, (or it is impossible to identify the cause of the pollution more precisely), a tax or an outright ban still makes sense. A tax or ban would reduce local consumption as well as foreign, thus reducing overall environmental damage. A tax would also raise revenues for the government which it may be able to use on something more beneficial than cattle farming.

If the other countries in the world don't tax beef sales, then Argentina still benefits from reduced environmental damage locally, and the population will shift to whatever is now their comparative advantage economically.

We've all been duped by our imperfect understanding of Latin American politics. This is a case of putting "lipstick on a pig" to use the faddish euphemism for spin.

Argentina announced last week it had dosciovered foot and mouth diasease within its cattle herd. The ban on exports is a market confidence measure - it was likely most countries would have stopped imports of Argentinean beef anyway, so Kirchner is just making a political virtue of necessity. No dark conspiracies, environmental motivations, and nor is it a policy driven by statist economics.

Market Report from Dalby Saleyards weekly sale. 7,100 cattle yarded; market for export cattle dearer. Thank you Mr Kirchner. 72,000 cattle slaughtered in Queensland this week. I estimate 65% of that beef destined for export. The real world.