Incompetent control freak government ruins Argentina's economy

Nita Ghia:

In an effort that is almost certainly futile, Argentine Interior Commerce Secretary Guillermo Moreno is reviving a 1974 law that compels holders of suitable stockpiles of flour to sell into the market at frozen prices.

This follows hard on the heels of a policy that froze supermarket prices in February of this year in an equally futile bid to bring inflation under control.

Wheat production in South America's largest producer has fallen in recent years as farmers react to massive uncertainty. Punitive measures — including fines and imprisonment — further reduce the incentive to produce goods and bring them to market.

Returning to the rule of law and securing property rights are critical in order to restore productivity to Argentina's battered farmers and affordable food to its long-suffering populace.

Both output and the acreage under wheat have fallen as increasing government interference decreases the attractiveness of farming.

According to data from the U.S. Department of Agriculture, in a study by North Dakota State University's Richard Taylor and Won W. Koo, harvested area in 2011 fell to 12 million acres, compared to 15 million acres in 2000 — while output fell to 14.5 million metric tons from 16.2 million metric tons, respectively.

Last year, the area planted dropped again, to 9 million acres, the lowest in 100 years. This fall came in the face of rising global prices, placing the blame squarely on domestic policies.

The decline in production began in 2006, when then-President Nestor Kirchner set export quotas. These quotas are still in place, leaving producers at the mercy of bureaucrats granting the necessary export permits.
...
As Argentina demonstrates, lavish endowment of natural resources is not enough to make or keep a nation wealthy. At the turn of the 20th century, Argentina was one of the 10 richest countries in the world. According to the World Bank, it now ranks 62 and is likely to keep sliding.
...

There is more.

Farmers have been abused as a mans of government vote buying, but they are not the only ones effected by the country's government of thieves.   Spain's state owned oil company had its rights to drill in a new shale field taken from them without just compensation.  The farmers were force to pay a tax on grain they exported.  It is hard to imagine a policy more likely to reduce production.  The Kirchner's just were not smart enough to lead the country and their rule has seen it slide further behind.