AGRICULTURE-ARGENTINA: Small Farmers, a Disappearing Breed

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Jan 11 1999 (IPS) - A third of Argentina’s small and medium-size farmers have fled to its cities in the past decade for want of support against climate woes, lower prices and unfair competition.

While thousands of large-scale producers – many of them foreigners – have been able to expand their operations, smaller producers have barely managed to survive.

Fertilizers and agro-chemicals, new irrigation systems, bio- technology, and the privatization of the transport sector have helped increase productivity in Argentina, whose annual agricultural production is close to 65 million tonnes.

More than 60 percent of the country’s exports come from the countryside, and food products are an emerging high-growth sector, but the benefits of all this have been unevenly shared.

Rene Boneto, president of the Agrarian Federation of Argentina, said in an interview that 35 percent of the some 380,000 small and medium-sized farms have disappeared in the past 10 years, and many of the rest are in dire financial straits.

Producers owe banks more than seven billion dollars. Most have defaulted on their debts and are about to lose their land, said Boneto, adding that farmers owed suppliers a similar amount.

To make matters worse, global cereal and oilseed prices fell by 20 to 35 percent in 1998, poultry and pig rearers have been suffering from unfair competition and parts of the countryside were flooded last year.

At first, farmers migrated to country towns and found public- sector jobs, and many people who managed to leave the countryside with some capital bought cars and became taxi chauffeurs.

But now that provincial governments face budget deficits, migrants who arrive in cities without housing, capital or jobs simply increase the ranks of the urban unemployed.

In recent years, a network called ‘Mujeres en lucha’ (Women in Struggle), which emerged spontaneously, has been trying to block the public sale of land owned by defaulting farmers by holding demonstrations at such auctions, during which they hold hands and sing the national anthem.

Boneto said small farmers’ debts had quadrupled in the past 10 years because of a lack of support from a government which had encouraged the concentration of land and foreign ownership by making it easier to repatriate assets.

Much of the foreign investment is not in agriculture but is merely a matter of placing capital where it can reap guaranteed profits. This is the case of the Hungarian-American financier George Soros, and Italy’s Luciano Benetton, who have purchased thousands of hectares of productive land in Argentina.

Confirming the critical state of affairs, the state-owned Nacion Bank, which finances 50 percent of loans to the rural sector, said this month that there were 28,000 producers in default on their loan payments. The amounts of owed range from 10,000 to 100,000 dollars.

The bank promised that it would study a programme to refinance the debts through an initial payment followed by instalments stretched over 20 years, but Boneto said most farmers would not even be able to make the first instalment that would grant them access to the refinancing programme.

Although their land and number are shrinking, small- and medium- scale producers still make up 90 percent of all farmers in Argentina.

“The government did not treat small and medium-scale producers with the same yardstick, which is why even now, when harvests are better, the countryside has been modernized and there is more production from fewer hectares, only a minority of large producers are benefitting,” said Boneto.