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ARGENTINA: Boosting Agribusiness – and Family Farms

Marcela Valente

BUENOS AIRES, Oct 3 2011 (IPS) - A plan to boost agribusiness, but based mainly on family farming and cooperatives, in Argentina is geared to producing and exporting more food – in a more sustainable manner.

That is the goal of the Strategic Agribusiness Plan (PEA) that representatives of the country’s 23 provinces and of 53 university departments, 140 business chambers, 450 agrotechnical schools, and other national and foreign institutions involved in agriculture produced over a period of 18 months.

The mechanisms and conditions required for financing the project will now be discussed, to be put into effect – if the plan prospers – with specific targets set for 2020.

The plan is the result of the work of the Agriculture Ministry, created in 2009 after a lengthy stand-off between the government of centre-left President Cristina Fernández and the agribusiness industry over tax hikes on grain exports.

The programme is to be complemented by a law that would limit the purchase of land by foreign individuals or companies – a government-sponsored bill that is now under debate in Congress.

According to Agriculture Ministry spokespersons, Argentina produces enough food to feed 450 million people – 11 times its population – and the idea is to increase that to 650 million by 2020, not only in terms of grains, but also cooking oil, flours, cheese, dairy and other products.

“More growth is possible, but we don’t want it at the expense of the environment or by driving people from the countryside,” the national coordinator of Research and Development at the state National Institute for Agricultural Technology (INTA), Norma Pensel, told IPS.

INTA, which has branches in rural areas throughout the country, has worked hard on drawing up the plan together with large and small-scale agricultural producers, cooperatives and experts from the U.N. Food and Agriculture Organisation (FAO), the Inter-American Institute of Cooperation for Agriculture (IICA), the Economic Commission for Latin America and the Caribbean (ECLAC) and the U.N. Development Programme (UNDP).

Under the plan, grain production would rise from the current 100 million tons – half of which is soy – to 160 million tons by 2020. “That volume could even be exceeded, but the soil must be preserved,” Pensel said.

The country’s cattle herd is also set to grow, but along with measures to prevent overgrazing from further damaging desertified soil by putting a greater emphasis on feedlots.

But besides increasing output, the plan puts an priority adding value at origin and industrialising agricultural production in order to export product with greater value-added, generate jobs in the countryside and curb the rural exodus.

To improve social equality in rural areas, the PEA would give strong support to family farms linked in sales associations and to farm cooperatives, of which there are already a number of large ones.

“Family agriculture stopped being an expression of poverty like it was in the 1990s,” said undersecretary of family agriculture Guillermo Martini. “The state sees the sector as part of the solution for the demand for food.”

The ministry is supporting small-scale producers who were once subsistence farmers but now sell their surplus production through associations at local agricultural fairs where they also exchange seeds.

Undersecretary of agriculture Oscar Solís said the idea is not to replace companies with cooperatives. But he added that “this is the right political moment to put an emphasis on a change along these lines.”

The productive capacity of farm cooperatives is growing in Argentina, and their grain and meat production is increasingly industrialised. One of the biggest is Agricultores Federados Argentinos (AFA), which has 24,000 members, 85 percent of whom own less than 100 hectares.

AFA is based is in the eastern province of Santa Fe and has members in nine other provinces. The cooperative handles 4.5 million tons of soy, corn, wheat, sunflower, sorghum, rapeseed and peas a year.

It also has feedlot pens that hold 5,000 head of cattle a year, besides the herd of 54,000 owned by the members, a mill, a bottling plant; a cooking oil plant, and a feed mill.

The president of AFA, Carlos Trevisi, told IPS that the cooperative produces for the domestic market and also exports to Chile, Colombia, Uruguay and Venezuela. He added that it sells products with growing value-added.

Asked about the PEA plan, Trevisi said he hoped it would be useful. “The intentions are good. Limiting the need to transport cereals distances of more than 100 km is a good idea, but investments, infrastructure and credit facilities are needed,” he said.

“Small-scale producers are always taking large risks because of weather, price swings and uncertainty about the possibility of a ban on exports,” he said.

For the plan to work, he said, there should be greater export openness, roads must be built, railroads must be improved, credit should be made available at lower interest rates, and the steady growth of internal costs should be curtailed.

Over the last few years, as commodity prices have soared, the government has tended to adopt measures to limit exports in order to first ensure domestic supplies of staples of the local diet like wheat or beef.

The presentation of the plan helped smooth out the rural associations’ differences with the Fernández administration, although some have still expressed scepticism, such as the Federación Agraria Argentina, which represents independent small-scale producers.

“They talk about raising production volumes, but they don’t say which producers will be the key players in that process. The way things are going now we could reach 160 million tons, but thousands of us will fall along the wayside,” the Federation said in a communiqué.

“It is a step forward for the issue of the foreign ownership of land, the role of cooperatives and the question of value-added at origin to be addressed. But small and medium-sized producers need public policies that assign a key role to small-scale producers, or we will be headed for extinction,” the statement added.

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