Global Prospects for Dairy in Argentina and Chile: Evidence from Field Visits and Model Simulations
Frank H. Fuller, John C. Beghin, Michael Boland, Bruce A. Babcock, William E. Foster
August 2006 [06-MBP 11]
Fuller, F.H., J.C. Beghin, M. Boland, B.A. Babcock, and W. Foster. 2006. "Global Prospects for Dairy in Argentina and Chile: Evidence from Field Visits and Model Simulations." MATRIC briefing paper 06-MBP 11. Center for Agricultural and Rural Development, Iowa State University.
We assess the international competitiveness of the dairy industries in Argentina and Chile, combining recent market intelligence gathered from field visits with quantitative simulations of global policy reform scenarios. Both countries exhibit strong potential for export growth but face significant internal and external barriers to expanding their dairy industries. Global policy reforms would resolve some of the international obstacles to their expansion. Argentina has great potential, but it is handicapped by its current macroeconomic policies, trade policy distortions, and the uncertainty associated with policy implementation. Chile is more limited in terms of natural capacity for expansion, but it has a positive trade and investment environment.
Keywords: Argentina, agricultural trade policy, Chile, comparative advantage, competitiveness, dairy processing, exports, milk production.