Poverty Impacts of Changes in the International Prices of Agricultural Commodities: Recent Evidence for Argentina (An Ex-Ante Analysis)

Argentina has benefited greatly from the increase in prices of agricultural commodities. With a large share of its population with low and medium-low incomes; however, a sizable part of households is likely to be adversely affected by the accompanying rise in the price of the consumption basket. An ex-ante analysis suggests that this is the case. Changes through a less obvious channel (that is, in factor incomes) are likely to be more beneficial to middle-income households. In general, all households experience losses, with poorer households being the most affected. When accounting for transfers financed through the collection of export taxes, poorer households benefit. In the absence of compensatory measures, increases in the prices of agricultural commodities could potentially have an important impact in terms of indigence and poverty.