Travel Reference
In-Depth Information
But the cheap peso revived farm exports and the tourist industry too.
Grain sales expanded exponentially, prompting investors and farmers to
buy new machinery, plow pastureland, and plant soybeans and sunflow-
ers. Traditional harvests of wheat and corn also expanded. As manufac-
turing spread globally to India and China, urbanization there drove up
the prices of the world's food supplies. Soybean prices rose fourfold from
2002 to 2008. It did not matter that the federal government charged a 20
to 35 percent
advalorum
tax on the export of meat and cereals. The weak
peso still allowed Argentine rural production to profit in foreign mar-
kets. Moreover, foreign investors and buyers took heart that Kirchner
had retained Duhalde's steady and capable economics minister, Roberto
Lavagna. But the price rises for cereals also undermined the delivery
of foodstuffs to the domestic market. Beef and wheat supplies became
scarce, as the government had fixed the cost of meat and bread at arti-
ficially low prices to urban consumers. The price of nonregulated rices
and other perishables in the supermarkets shot up.
