The recent ban on live cattle exports
sparked strong outrage in the productive sector, and the liberal movement, which has been growing on social media for some time now, also raised its voice.
To explain it in simple terms: a producer can sell their cattle to the meatpacking plant and receive the price it offers. The meatpacking plant slaughters the animal and exports the meat. When the meatpacking plant is the only option for the producer, it can then pay as little as possible to obtain the raw material. The export of live cattle emerged as a competitive alternative, allowing producers to obtain better margins and more stability.
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Today, we are in a very favorable market moment for cattle ranching, with prices exceeding 5 USD per kilogram (2.2 pounds) of steer, when the usual is less than 4 USD. MGAP banned the export of live cattle, leaving the producer tied to a price set by the meatpacking plant and unable to take advantage of the international context. This acts as a disincentive for all production.
These things are not surprising in a country like Uruguay. The tied cow model is part of our idiosyncrasy. Let us recall other similar cases.
For example, how we are mocked in every electoral campaign for the Montevideo City Hall, when they promise a train, a tram, or a subway. That will never happen because it doesn't suit Salgado, as simple as that. Let us look at the results for the consumer: Montevideo is the only city in the region where the ticket exceeds 1 USD and, even so, the quality of service is terrible.
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Another case is football. Since 1998 —more than 25 years ago— Tenfield has had the exclusive rights to Uruguayan football. During that time, there has been corruption, pressure, and unchecked tax favors. Now, the "solution"? For Antel to keep the rights. We learn nothing.
What does the left say about all this? What happens regarding the left's discourse on the private sector and monopolies is paradoxical.
First, because they always criticize the so-called "malla oro." But who are more "malla oro" than those favored by the State? They also imagine the entrepreneur as a fat man with a briefcase, when 80% of companies in Uruguay are SMEs and entrepreneurs who are betting on this country.
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As for monopolies, what is never questioned is that the most dangerous monopoly is the state monopoly, or the one protected by the State. In an open market, if a company abuses its position, another can enter and compete. That forces quality to be maintained or prices to be lowered. That is called progress.
State intervention not only erodes the productive apparatus, but holds us back compared to other countries. We should have learned decades ago that competitiveness generates better products and more affordable prices. It is the consumer who pulls the cart. The market rewards those who understand it.
In the country of the tied cow, the main victim is the consumer, especially the poorest, those whom politicians claim to defend while eating canapés with their buddies.
Let us reason something. From the 70s to today, all the countries in the region have grown in population and development. Uruguay went from 2.8 million to just over 3 million, and more than 100,000 are foreigners. We are a country with no future for its youth, with a handbrake imposed by this exhausted model.
We already have the burden of being a small market. We can't afford to pay overprices to benefit "empresaurios" who are friends of politicians. It is time to wake up from the Matrix. Let us take the red pill. It is time for a change.
