2010-02-22

Argentine government questioned on meat inflation

The rapid inflation of the price of meat in Argentina during the past year has citizens critical of President Kirchner’s administration. (Daniel Garcia/AFP/Getty Images)

The rapid inflation of the price of meat in Argentina during the past year has citizens critical of President Kirchner’s administration. (Daniel Garcia/AFP/Getty Images)

By Ezequiel Vinacour for Infosurhoy.com—22/02/2010

BUENOS AIRES, Argentina – President Cristina Fernández de Kirchner’s administration is being questioned by its citizens over the steep price hikes of staple foods, especially meat.

Since November 2009 the price of meat has risen more than 40%, according to figures released by the Argentine rural society [Sociedad Rural Argentina (SRA)], the country’s farmers’ union.

Fernández de Kirchner attributed the hike to poor weather conditions and inaccurate media reports.

“The price of meat has risen because it has been raining a lot,” the president said during a media conference Feb. 9. “But we should know, that sometimes the meat that is being sold is rotten, and I am talking about the one packed by TV, newspapers and radio.”

The Argentine rural society rejected Fernández de Kirchner’s statement.

“The cause of the hike is not the rain or the speculations of the media, but the result of bad policies promoted by this government,” said Nieves Pascuzzi, economist of the SRA’s institute of economic studies. “During the last five years, the price of meat has increased 300%. This is the legacy of the prices set by the administration and the restrictions on exports.”

“The foundations of the economy of Argentina were established on the meat industry, and the internal consumption by the country is one of the highest in the world,” said Mauro Spagnolo, financial advisor at Argentine financial company Estructuras y Mandatos. “When inflation affects the price of meat, then society divides between those who can afford meat and those who cannot.”

The prices of different types of cuts of meat have risen significantly during the past years, according to a report based on SRA figures by the Argentine newspaper La Nación. For example, beef loin has risen from $10.05 pesos (US$2.60) per kilo in 2007 to $29.25 pesos (US$7.58) this year, an increase of 189%.

But meat is not the only food that’s become more expensive.

“Between November and December of 2009, the collective cost of the country’s staple foods according to the government increased 4.7%,” said Beatriz García Buitargo, president of the non-profit organization Consumidores Argentinos. “This percentage was led by the rising costs of dairy products, meats, canned goods, bread, seasonal fruits and vegetables.”

Inflation in 2009 was estimated at 7.7%, according to data gathered by the national institute of statistics and census [Instituto Nacional de Estadísticas y Censos (INDEC)]. But private consulting firms questioned INDEC’s data, claiming actual inflation was more than double, according to a report in the newspaper El Cronista.

“Credibility on the measurement of inflation is one of the most important pending tasks of this government,” Spagnolo said. “Since the government started changing INDEC’s data, the prevailing atmosphere of uncertainty has increased in relation to the real value of products. This affects the real value of salaries and the quality of life of the citizens.”

The escalating cost of food is causing middle-class families to make budget cuts.

“It is clear that things are expensive and the products for school (pencils, pens and paper) have gone up a lot, too,” said María Gutiérrez, a housewife. “The prices are higher than last year. Now, we will have to get used to eating chicken and buying less stuff than in 2009.”

Unión de Usuarios y Consumidores, an Argentine consumer union, claims the inflation rate last month was 2.1% – not 1% as stated by the government.

“Paradoxically,” Spagnolo said, “the government looks for support in the social sector, and it is the most affected by this situation.”

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