AGRICULTURE-ARGENTINA: Worst Drought in 100 Years

AGRICULTURE-ARGENTINA: Worst Drought in 100 Years
By Marcela Valente

BUENOS AIRES, Jan 21 (IPS) - Severe drought, which is many parts of Argentina is considered the worst in 100 years, has hit the country’s most agriculturally productive region and is expected to cause a sharp decline in grain and meat output.

Rural associations estimate that grain production will drop 39 percent and that 1.5 million head of livestock will be lost, while meat and dairy productivity levels among the surviving animals will be poor.

Drought assistance measures adopted by the government of Cristina Fernández include deliveries of livestock fodder, but farmers say the aid is insufficient given the magnitude of the disaster and are now directing their demands towards provincial governments.

The drought extends from the southern province of Río Negro through the central provinces of La Pampa and Córdoba and east and north to the provinces of Buenos Aires, Entre Ríos, Santa Fe, Corrientes, Chaco, Formosa and Santiago del Estero. It has especially hit the entire 600,000 square kilometre pampas grasslands region, considered one of the most fertile areas in the world.

Chaco Governor Jorge Capitanich predicted that in his province, agricultural output will be half of what it was last year. The area planted in wheat and sunflowers is smaller this year, and yields are down due to the lack of rainfall, he said.

And among corn producers in Entre Ríos, losses are estimated at over 80 percent.

An agricultural emergency has been declared in Chaco, Entre Ríos and Santa Fe, which gives farmers a six-month moratorium on tax and debt payments.

Although rainfall was scarce throughout most of 2008, the drought affecting the 10 provinces, which include the country’s agricultural heartland, has become even more severe in the past few months.

In the northern part of the province of Santa Fe alone, 300,000 head of cattle have been lost, and the rest are surviving in difficult conditions. In addition, fewer animals are pregnant.

The secretary of the Argentine Rural Confederation (CRA), Javier Jayo, told IPS that the current harvests of wheat, corn, soy and sunflower – the main crops – will be 30 million tons lower than in the last growing season.

The 2007-2008 harvest reached a record 97 million tons, including 47 million tons of soy. But political, economic and now climatic factors have conspired to bring about a poor 2008-2009 yield.

First there were the March to July 2008 roadblocks staged by rural associations, whose members were protesting the centre-left Fernández administration’s decision to increase export taxes on soy and grains. The government finally eliminated the tax hike.

Then came the global financial crisis that originated in the United States, which led to a plunge in commodity prices. The price of soy, for example, which was fetching more than 600 dollars a ton, had dropped to half that by the end of the year.

Now the most pressing problem is the climate. According to a report by the National Institute for Agricultural Technology (INTA), "in many parts of the pampas region, rains have been at their lowest level in 100 years."

The drought has caused a seven to eight million ton drop in wheat production, from 16 million tons in the last harvest to around eight million, INTA reported.

"The wheat yield was the lowest in 30 years and everything indicates that national production of corn, soy and sunflowers will also be far below the growing levels of production seen in the last few years," said the INTA report.

Although INTA has not provided estimates of output other than for wheat, which has already been harvested, rural associations have produced projections.

The CRA predicts that the corn harvest will amount to 15 million tons, down from 22 million tons in the last season, while the soy harvest could shrink from 47 to 37 million tons, if the scarcity of rainfall continues.

As a result, farmers will suffer at least seven billion dollars in losses, and revenue from taxes on grain exports will be down, said Jayo.

"This time the drought extended throughout the entire pampas region, the best agricultural and ranching area, and the rains increased in arid zones," Alicia Urricarriet, an economist with the Argentina Rural Society (SRA), which represents large landowners, told IPS.

She said the drought in Argentina and Brazil, which together cover 50 percent of global demand for soy, is driving up prices on the Chicago Board of Trade, a global commodity futures exchange.

According to Jayo, the recovery of prices is a reaction to the fall in Argentine production.

Farmers, having just emerged from a year of record output and prices, are thus preparing to face the impact of the dire new conditions. (END/2009)