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ARGENTINA: Who Are Today’s Farmers?

Marcela Valente

BUENOS AIRES, Jun 25 2008 (IPS) - “I could even do without land, my business would not be affected,” Gustavo Grobocopatel, one of Argentina’s largest agribusiness owners, said some time ago. His case illustrates how the rural sector includes much more than the associations leading the radical farmers’ protests of the past few months.

“I own little land and don’t do any farming; I contract services from third parties, instead,” boasted the owner of the Grupo Los Grobo, a family-run business that controls 150,000 hectares, of which 90 percent is leased to produce soybeans and beef.

“We produce one million tonnes of commodities,” calculated the businessman, who also has agrifood businesses in neighbouring Paraguay and Uruguay.

Argentina has 25 million hectares of land under cultivation, and the potential to add another 10 million hectares, according to the National Institute for Agricultural Technology (INTA). The country is estimated to produce enough food for 380 million people, nearly 10 times its population.

Who are the big primary producers? There is a handful of companies that stand out, although they do not necessarily own the land. They have kept an extremely low profile in the conflict over the tax hike on soybean and sunflower seed exports, a measure that does not threaten their livelihood.

Like Los Grobo, another big “landless” company is El Tejar, an association of producers who farm more than 180,000 hectares in Argentina, Bolivia, Brazil and Uruguay, devoted to the production and export of beef and to the cultivation and export of grain crops, mainly soybeans.

El Tejar has also grown through land leasing and outsourcing. By 2012 it is expected to produce 3.5 million tonnes of grains on one million hectares of land in the region, whether owned or rented by the company.

Neither Los Grobo nor El Tejar belong to the farmers’ associations that launched a nationwide strike and roadblocks in March to protest the increase in export taxes on oilseeds adopted by the centre-left government of President Cristina Fernández.

The roadblocks, which were joined by truck drivers unable to work because of the farm strike, caused food and fuel shortages, but were suspended on Jun. 20 until Congress debates the export tax system.

“It’s not that it doesn’t suit them for the tax to be reduced, but they have so much more autonomy. They deal on a large scale and have lower costs,” Guillermo Neiman, head of the agrarian social studies master’s degree programme at the Latin American Faculty of Social Sciences (FLACSO), told IPS.

Their connection with farming organisations is for technical purposes, more than for the benefits of belonging to a producers’ union, he said. They belong to AACREA (Argentine Association of Regional Consortiums for Agricultural Experimentation), which works to increase production efficiency in agribusiness, or to the Argentine Association of Direct Seeding Farmers (AAPRESID), which spreads knowledge of the benefits of this system and biotechnology for growing soybeans.

Other large producers do own land, like the Cresud company which has over 165,000 hectares, or Adecoagro, owned by Hungarian-American magnate George Soros, with 220,000 hectares, mainly in Argentina but also in Brazil and Uruguay.

The Urquía family, too, owns large farms on which they grow grains. However, the crops are used to produce oil and flour for the domestic and export market, which means their activities are classed as agroindustry. They also have the concession on a network of freight railways, and provide port services.

Among the farmers’ associations that are leading the resistance to the export tax hikes, the most powerful is the Argentine Rural Society (SRA), whose 10,000 members are large landowners, traditionally raising beef cattle, although more recently many of them have moved into soybean production.

In the past few years, cattle ranching has lost five million hectares to soybeans, now the country’s leading export crop.

Also active in the protests are the Argentine Rural Confederations (CRA), representing 100,000 medium-sized producers with farms ranging from 200 to 1,000 hectares, “some of them larger,” one of its members told IPS. They produce wool, tobacco, citrus fruits, cereals and beef, but their strong suit is now also soybeans.

“Our members live in the countryside, and belong to the rural associations in their local towns. In contrast, the big landowners have their own organisations,” said the CRA spokesperson, referring to AACREA and AAPRESID.

Next is the Agricultural Inter-Cooperative Confederation (CONINAGRO), an association of about 1,000 cooperatives, including the powerful SanCor dairy cooperative. They produce rice, grains, dairy products, beef, tea, tobacco and other products, and together account for six percent of the country’s gross domestic product (GDP).

Finally, the most combative of all is the Argentine Agrarian Federation (FAA), with 100,000 members owning between one hectare “or less,” as one of its members says, and 400 hectares “or more.” They produce fruit, vegetables, cereals and beef, but for all of them their premium crop now is soybeans.

“I work 300 hectares, of which 250 are planted with soybeans. On the rest I grow some wheat and raise cattle,” Alejandro Mareque, a member of the FAA with land close to Máximo Paz, a city in the eastern province of Santa Fe, told IPS. “The problem is that it’s much more expensive for us to buy fertilisers or seed than for the large producers.”

Faced with these difficulties, some farmers prefer to rent their fields and live on the income. Their prosperity is evidenced by conspicuous consumption of items like high-end automobiles or yachts. Sales of these shot up in 2007 in cities like Rosario, the largest city in Santa Fe and the third largest in Argentina, where prices are mentally calculated in terms of quintals (100 kilograms) of soybeans.

Where Mareque has his farm, soybean yields are 36 quintals (3.6 tonnes) per hectare, so on 250 hectares he can produce 900 tonnes. The international price is about 560 dollars per tonne; after paying the export tax, Mareque will receive 300 dollars per tonne.

According to Neiman, although the four associations retain their traditional differences, after the economic crisis in early 2002 their members have begun to resemble one another more and more. “The Rural Society has changed over from cattle to soybeans, and the Agrarian Federation represents soy producers with larger landholdings, so overall they have become more homogeneous,” he said.

However, this community of interests depicted by the local press as representing the country’s farmers is only part of the rural sector, and not necessarily the most powerful part, either. The major producers are outside of these associations.

“The new modes of production are not based on land ownership. Companies lease land, and producers come together in firms, look for investors and contract services for sowing, harvesting, storing or buying seeds,” said Neiman.

Economist Daniel Lema, who studies the impact of technological change on rural areas, concurred. “Land ownership statistics don’t tell us very much about the reality of the countryside any more, because 60 percent of Argentina’s agricultural production is done under some form of subcontracting or outsourcing. It’s a very complex web,” he told IPS.

Over the last eight years, a marked division has occurred between ownership and control of the land, said Lema, who works for INTA. A small producer can own 200 hectares and rent another 200 or more, like the large producers do, he said.

Another novelty is the use of highly-qualified human capital. “There is full employment nowadays for agronomists or veterinarians. Many who haven’t even finished their thesis yet are already working for agricultural companies,” he said. And greater knowledge and more technology allow production on a larger scale.

However, he ruled out a swift process of concentration of agricultural activity, a scenario feared by small producers who do not want to be absorbed by larger ones.

“Industrial activity is highly concentrated. A few companies can dominate half or 70 percent of an industry. But in agricultural production, there is much less concentration. The top eight establishments produce a maximum of five or six percent of the total,” Lema said.

In his view, the situation is unlikely to change much in the short or medium term. “Managing large areas of land is very complex. Medium-sized farms are more efficient. Large companies exist, but most farms continue to be small or medium in size,” he said.