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Rents, “infant industry” and contingent protection policies: gains and losses for Argentina’s biodiesel industry

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  • Nogues, Julio
  • O'Connor, Ernesto

Abstract

Since 2007 and in response to nascent legislation providing subsidies, Argentina’s biodiesel industry started growing fast. The legislation was approved on the target idea that the economy should diversify away from exporting primary products, and shifting to higher processing stages in this case, shifting from soybeans to soybean oil and biodiesel. Initially, responding to these policies clearly tilted towards foreign sales, most of the output was exported. Nevertheless, these export subsidies put investment at risk when the EU imposed antidumping measures. More recently, policies have been tilted towards sales in the domestic market but at the cost of government controlled biodiesel prices. The paper offers estimates of protectionist rents (subsidies) received by the industry from export sales, as well as from sales in the domestic market. We also address the future risks in international markets of continuing with a policy of subsidized exports.

Suggested Citation

  • Nogues, Julio & O'Connor, Ernesto, 2020. "Rents, “infant industry” and contingent protection policies: gains and losses for Argentina’s biodiesel industry," MPRA Paper 102419, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102419
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    References listed on IDEAS

    as
    1. Elias A. Baracat & J. Michael Finger & Raúl León Thorne & Julio J. Nogués, 2013. "Sustaining Trade Reform : Institutional Lessons from Argentina and Peru," World Bank Publications - Books, The World Bank Group, number 15794.
    2. Colomé, Rinaldo Antonio & Jorge Darío Freitag & Germán Fusta, 2011. "Tipos de cambio real y tasas de "protección" a la agricultura argentina en el período 1930-1959," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 91-126, January-D.
    3. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    4. Sturzenegger, Adolfo C. & Salazni, Mariana, 2007. "Distortions to Agricultural Incentives in Argentina," Agricultural Distortions Working Paper Series 48389, World Bank.
    5. Baracat, Elias A. & Finger, J. Michael & Thorne, Raul Leon & Nogues, Julio J., 2013. "Sustaining trade reform : institutional lessons from Peru and Argentina," Policy Research Working Paper Series 6610, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Biodiesel; escalated export taxes; export subsidies; Argentina; European Union; antidumping.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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