Argentina’s Soybean Acreage Response to Changes in Price Incentives

Abstract

This paper analyzes the response of the area planted with soybeans in Argentina to changes in price incentives and other relevant variables in agricultural production. For this purpose, VEC (Vector Equilibrium Correction) models are estimated for some of the main producing provinces and for the country as a whole, covering the period 1974-2006. The estimated models allow to analyze the long-term relationships between the share of the area planted with soybeans, relative prices, the use of some inputs and risks. For the models where cointegration relationships are observed, positive and significant responses of the area planted with soybeans to changes of relative prices are found.

JEL classification: C1 ; Q1 ; R3