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Global Warming is boosting Argentina’s Soya Harvest to record levels

 

 

 

 

argentina grain charts

In all the major agricultural regions of the country, farmers have struggled for years against the populist government of Cristina Fernandez de Kirchner whose insane economic policies have brought the country nearly to its knees.

Now, this record soyaharvest is giving a boost to their nemesis, increasing international reserves that are vital to help the government prevent another currency crisis. On Wednesday, the central bank said the harvest would help maintain the current level of reserves of $ 28 Billion until year end.

Farmers are aware of the irony: “One in three trucks loaded goes directly to the government,” said Carlos Bunge, farmer and descendant of the family that founded 130 years ago germano argentina grain trading company. You feel as if you were feeding a monster.

With the harvest in full swing until July soyabean exports have generated over $ 8 Billion US and is believed to reach a record U.S. $ 29 Billion, according to official data and analyst projections.

Soya is the most profitable grain to Argentina, representing about a third of the country’s sales abroad.

For Argentina, the money could not come at a better time, as the country faces a cooling of the economy, the highest inflation rate in Latin America after Venezuela and an acute shortage of foreign reserves, in addition to limited access to international financial markets since its 2001 default.

The Kirchner government has asked farmers but against their will, to speed up selling grain to avoid a repeat of the disastrous run on the currency that happened during January chief of staff, Jorge Capitanich recently met with major grain exporters in the presidential palace to explain their arguments.

There are good prospects this quarter, with great prices” Capitanich told reporters after the meeting. That means capital flows and jobs.

However, farmers who say they feel affected by what they see as excessive taxation and regulation, are resisting.Producers are selling some of their harvest to pay debts after the Kirchner government this year would end subsidized loans to the farmer.

However, farmers want to keep the rest to protect themselves against inflation and an expected weakening of the peso, while taking advantage of the higher prices that occur after harvest.

The grain harvest is like having cash under the mattress,” said the farmer Francisco Santillan while touring a section of an area of 2,200 hectares he administered. We do not use banks, we use grain silos.

The giant haciendas of this rich agricultural belt are located about 240 kilometres Northwest of Buenos Aires. The apparent calm, however, hides a rebellious tradition dating back to the seventeenth century, when this region was part of a clandestine smuggling route trying to circumvent the trade restrictions imposed by Spain.

In 2008, when Néstor Kirchner, late husband and predecessor Cristina Fernandez de Kirchner, tried to raise taxes on soyabean exports from 35% to a floating rate with a cap of 50% of the pampa farmers blocked roads and They closed the trade of grains and meat.In the end, Congress voted against the proposal.

The Kirchner government continues to struggle against farmers, accusing them of coup leaders and oligarchs. The president has said that farmers are blessed with wealth and income, a wealth that should be shared with the poorest of the country.But Kirchner policies have reflected the supremacy of soya.

The Kirchner’s stopped periodically exports of corn, wheat and meat to contain the high prices in the local market. However they never restricted exports of soyabeans, which is mainly used as animal feed but also for tofu, cooking oil and soy sauce, and the vast majority of Argentines do not eat. Why would they when they have the best beef in the world.

This policy meant many farmers began in the last decade to plant soybeans exclusively, although the more experienced farmers insist that a rotation is essential for soil health, If not for soyabeans, we would starve,” says the farmer Nestor Marchessotti. Sadly this monoculture farming will one day cause them huge problems with soils and plant health.

This year, the government has taken measures to stabilize the economy and reversing the decline in international reserves, mainly by raising interest rates and reducing subsidies of energy and water consumers.

With elections next year time is running out to get the economy back into some sort of normality.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

www.gatewaytosouthamerica.com

 

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Geoffrey McRae

About Geoffrey McRae

Geoffrey McRae is the founder of GTSA - Marketing. He is a New Zealander with a strong Agro-business and Real Estate background spanning over 30 years. Prior to coming to South America, he was one of Australasia's most successful Real Estate negotiators reaching the highest level in the industry. He has a reputation as a brave and a formidable negotiator and creative 'deal maker'. His reputation for discretion, experience, and expertise have involved him in representing some of the world's highest profile investors. I hope you enjoy reading our news site. Please share it on your social media below.

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