GIEWS Update: Argentina - Food emergency declared by the Government amidst worsening access to food

Highlights:

• The Government declares the food emergency law until 2022, as the upsurge of food prices is severely constraining access to food.

• Despite the expected record cereal production in 2019, prices continue to increase mainly due to the sharp weakening of the local currency and soaring inflation rate.

Argentina increases financial support for food progammes

The food emergency law, to be valid until 2022, was approved in September 20191 amid the high inflation that significantly eroded households’ purchasing power. Aiming to guarantee adequate access to food, of the vulnerable population in particular, the law sets out 50 percent increase in budget for public food and nutrition policies by the end of 2019. The budget is officially estimated at 10 000 million Argentinian pesos (ARS),2 equivalent to about USD 184 million. In the 2020-2022 period, the budget will be revised quarterly according to the changes in prices of basic consumer goods, including food and non‑alcoholic beverages. However, given the already high fiscal deficit, the intended increase in the current budget could escalate the burden on fiscal resources.

Argentina’s economic crisis and its negative impact on livelihoods

Since 2018, the country’s real GDP is experiencing a negative growth, coupled with a sharp depreciation of the local currency. The weakening of the ARS has stemmed from a decline in foreign investments (mainly due to increasing US interests) and a lower demand for Argentine Peso3 on account of the yearly decline in maize exports in the 2018/19 marketing year, affected by dryness during the first quarter of 2018. As of September 2019, the local currency has lost 97 percent of its value against the US dollar since early 2018, when the devaluation started. The annual inflation rate was 52.4 percent in the Buenos Aires Metropolitan Area in September 2019, with increasing prices of medical care, household equipment and food and non‑alcoholic beverages contributing to the upsurge.