By Marcela Valente
BUENOS AIRES, Jun 6 1997 (IPS)

While large-scale agribusiness in Argentina rejoiced over forecasts of a record grain harvest, medium and small farmers blocked 10 kms of the main route connecting the city of Cordoba with the capital Friday, demanding government measures to offset the effects of a devastating drought.

While the Secretariat of Agriculture has predicted a 53 million- tonne grain harvest this year – up from 49 million in 1996 – small and medium farmers have suffered 1.5 billion dollars in losses due to the drought.

A 10-km-long caravan of tractors, trucks and agricultural machinery blocked traffic Friday near the town of Canada de Gomez in the central province of Santa Fe, along the main route joining Buenos Aires and the city of Cordoba.

The protesters demanded an extension of the deadlines for the payment of loans and taxes as well as “fresh money to allow us to continue producing and avoid migrating to the cities, where we know there are serious problems of unemployment,” said Rene Boneto, the head of the Argentine Agrarian Federation and one of the leaders of the protest.

The drought has affected the northern provinces of Cordoba, Santa Fe, Entre Rios and Buenos Aires, the country’s richest grain and livestock-producing areas. According to Boneto, at least 25,000 small and medium farmers are facing a state of emergency in those provinces.

Meanwhile, soaring demand in Asia and Brazil, northern hemisphere crop losses and a reduction in subsidies in Europe have raised international prices by up to 50 percent, a phenomenon that has allowed large-scale producers to invest in technology and increase yields.

Since the early 1990s, the Argentine countryside has become increasingly concentrated in the hands of agribusiness companies, which have boosted their profits through substantial cost reductions and thus won a greater margin for confronting climatic hardships.

Small and medium-sized farmers, in the meantime, have fallen into ruin thanks to debt and drought.

The least expensive agricultural loans, those granted by the State-run Bank of the Nation, carry a 12 percent annual interest rate, in spite of inflation having been pulled down to below one percent.

This year’s drought compounded the effects of the debt burden. A state of agricultural emergency was declared in the provinces of Cordoba, Buenos Aires and Entre Rios, which indicated that although serious losses were suffered, some areas could still recover with an inflow of cash.

But the Secretariat of Agriculture declared a large part of the province of Santa Fe, the site of Friday’s protest, a “disaster area” due to the irreversibility of the losses.

The producers grouped in the Agrarian Federation are demanding that the government grant them a respite. They want their debts to be rescheduled, as well as 500 million dollars to cover the expenses of families on the edge of bankruptcy, and to plant the next harvest.

A government offer of an 80 million dollar credit fund that would provide two-year loans of up to 10,000 dollars per producer at an 8.5 percent annual interest rate was considered insufficient by farmers.

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