Thanks, Gaucho.

As you might imagine, I'm not a tremendously big fan of La K halfway through her "first" term ...but I liked El K for the most part. Who I always liked was Duhalde ...the guy who stepped up to bat after howmany? presidents in one month, fixed the crisis, then handed power over to his successor. That guy never gets enough credit for that. They say he's not too fond of Los K, either.

I really don't mind measures like price-controls; they are good short-term measures and more governments should consider them. But the trouble is that short-term measures always seem to take on a life of their own ...then they become permanent ...then, what was a good idea originally starts to cause problems because it's lived out its usefulness.

Although I'm an immigrant, I consider myself an Argentine patriot. I came here to "hacer la América" in my own small way like millions before me. Are we growing too much soy here, as Cristina says? Yes. Should we do something about it? Yes. Did I take the best part of my pastures away from beef production to grow soy and other crops? Yes.

What happened was this: at the height of the "grain price bubble" the government said that it was bad for Argentina and that they were going to take steps against the "soy-ization" of the country. Not a bad idea.

What they actually did, however, was to impose a 35% tax on the export of soy. Also not a bad idea in itself, either, if you want to influence what farmers plant.

How they screwed it all up was: they imposed the tax in the middle of the harvest of all that soy ...at a time that it was bringing farmers the highest prices that they'd seen in ages.

That was seen as confiscatory ...and the government wasn't seen as trying to influence anyone ...but rather they were seen as horning in on one of the only big paydays that farmers had seen in years.

If you actually want to influence what farmers plant, you do it before planting ...in the spring, before they plant whatever it is they are thinking about planting. You could warn that if the farmers continue to plant too much of "whatever" ...you are going to take a huge chunk of their profits.

That's not what they did. They took a big chunk of the profits from the farmers' decision to plant something that nobody said was bad when they planted it... and told them that it was only to influence their future decisions.

Farmers got very angry at that. It caused a rural strike. The president handled it badly.

In my opinion, if they had allowed the farmers the profits from the previous year's decision to plant certain crops such as soy, then imposed a tremendous tax on decisions like that in the coming year ...there would have been no problem. As it happened, farmers blocked the roads and withheld their harvest from the market.

All the above happened on top of the same sort of measures to influence the beef producers here. There had already been "short-term" measures taken to "influence" beef producers. The credibility of all those measures just simply fell apart. Ranchers started to get out of the business in light of the continued pressures on agriculture in general.

The really bad part is that when cow-pasture is converted to crops ...it doesn't get converted back to cows.

My wife and I believe that good, grass-fed, Argentine beef will become profitable someday. That is why we are holding onto our herd when so very many of our neighbors are abandoning ranching (already, 40% of Argentine beef comes from feedlots ...like almost 100% in the US.) We've had the luxury, so far, of refusing to give up grass-fed beef production. Most of the people we know haven't; they've thrown in the towel.

I don't think that Los K want to go down in history as the administration that killed Argentina's preeminence among beef producing nations ...but when you are a politician under pressure, short-term political gain is hard to resist.

Love,
Mike
Buenos Aires