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Abstract

The livestock sector in Ecuador represents an important productive sector because it involves rural labor, produces foods that are part of the daily diet of people (meat and milk), other goods and raw material consumption. The interest in issues related to production incentives is always important; however, their impacts are highly critical in the livestock sector with special attention to the magnitude of its impact both financial and productive. If you set the price of beef at $ 0.45/lb, net profit after taxes declines since at 0.085% for every 10% change in the rate of rural land tax (ITR) for a producer of 100ha; while for a producer in 1000 has, under the same assumptions, this margin drops by 0.105%. On the other hand, setting the price that the milk producer receives both medium and large at levels close to USD $ 0.45/l, a variation of 10% of the ITR rate would produce a negligible reduction in their marginal profit after taxes.

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