Publications

Competitiveness of the Beef Sector in Argentina and Canada

Foreword

Food markets are becoming global and competition in all markets is intense, countries are working to improve market access through the current round of World Trade Organization negotiations and through regional agreements such as the Free Trade Area of the Americas. Trade is critical to Canada's agri-food sector. Canada is a major agricultural producer with a relatively small population. As a result, we export almost half of our farm products. Because of the magnitude of our exports, the success of the agri-food sector depends, in large part, on international markets.

International competition is increasing from low-cost countries, with little government support. Argentina has significantly increased agricultural production in the past ten years using their low costs to increase world market share with relatively low levels of government support. The competitive position of the Argentinean beef industry, however, depends on meeting required safety standards, which is critical to their success. Currently Argentinean authorities main goal is to free cattle from Foot and Mouth Disease (FMD). FMD remains the single most important constraint on trade in live animals and animal products and is the disease most feared by those countries with a large and efficient livestock industry. The central problem is that no currently available test is sufficiently sensitive to identify persistently infected animals with 100% certainty, making it difficult to convince any country to start importing vaccinated animals.

The country's disease status is important to avoid the erosion of consumer confidence in the safety of eating beef. Apart from the social consequences, the loss of production and the loss of trade markets cause serious economic losses. Virtually all world meat markets are fragile. However, Canada has been free of FMD since 1952 and free of Bovine Spongiform Encephalopathy (BSE) or "Mad Cow Disease" since 1993. Argentina is currently recognized as being BSE-free.

In February 1999, Argentina announced that it had concluded its vaccination program and was FMD free. As a consequence of these developments, it had been anticipated that many new markets would open to Argentina fresh and frozen beef products. In May 2000 Argentina obtained the status of FMD free country without vaccination from the Office International des Epizooties (OIE), and in a short time, Argentinean beef exports went to 75 different markets as reported by the Secretaría de Agricultura, Ganadería, Pesca y Alimentación (SAGPyA). In August 2000, Argentina issued a voluntary ban on beef exports due to the re-detection of FMD and initiated other measures to control disease spread. The main goal for the Argentine authorities is to free cattle from FMD once again through application of the "National Plan for the Eradication of FMD, 2001-2005".

Part of the implementation of the Agricultural Policy Framework (APF) is to support global market success for industry through a Value Chain Roundtable Process (VCRP) to work towards enhancing the sector's competitiveness. Part of the VCRP involves benchmarking the competition for the industry. As Argentina meets the strong sanitary and phytosanitary regulatory process essential in any trade agreement, it could exert major pressure on the Canadian cattle sector. The study of "The Competitiveness of the Beef Sector in Argentina and Canada" provides the benchmarking of the sector through the use of a set of competitiveness indicators and it is complemented by a discussion of factors determining competitiveness in both countries.

  1. This study was completed in May 2002 and it was during the final phase of publication that the single case of BSE in a cow from an Alberta farm was detected as part of Canada's ongoing BSE surveillance program in May 2003. The animal was condemned at slaughter so the carcass was not processed for human consumption; although more than 2,700 animals were destroyed and tested as part of the investigation, no other case has been detected. BSE has been a reportable disease in Canada since 1990.

Competitiveness of the Beef Sector in Argentina and Canada (PDF version, 1.62 MB) - Help on PDF

For more information on this publication, please e-mail: Econ_Research@agr.gc.ca.

Publication 2164/E - ISBN 0-662-33660-7 - Catalogue A22-299/2003E-IN - Project 03-023-wp