Why Is Argentina Trying To Import Farmers

[elvikingo]

Hi- I’m new to this forum (today!), but, if I may, the topic is rather large. I've really enjoyed what’s been said above, but it seems the reason is most likely specific to part of the farming sector only.

I've seen this story about working with India circulating for many years in different headlines, stories and forums and it's not limited to potential Argentine policy. Both Uruguay and Brazil have made similar overtures with Indian interests.

I think you have to view it by what kind of farming they are referencing? If it a Chacra- that is smaller scale production of vegetables and other hand grown and hand harvested “truck farm” crops, then it somewhat makes sense.

My direct experience in Arg is not in vegetables, but the sector does appear to have big structural inefficiencies and problems. This seems to be the focus of these ‘invitations’ and exchanges. It’s the same here as in Europe or the States- being bent over picking vegetables all day sucks and no one wants to do it (especially in the current political climate here and other places), so importing a surplus of labor (India) to a country with a surplus of the best arable soil on the planet (Arg) might make sense to both. Not sure I agree, but I think that’s the gist.

My experience is in Bs As provence in grain farming. The grain sector is extremely competent and competitive. Especially the farmers themselves- again, some of the linkages past the farm-gate are very challenging, but the problem is not for lack of labor- the enthusiasm amongst young, bright and able Argentines is impressive. Where I've lived and farmed, I’ve always been struck by the average age compared to the same sector in the U.S. At any gathering of producer-farmers I've ever been to in Argentina the average age is always under 50. In the U.S. and Europe it's the exact opposite- it’s only old guys.

 

[davonz]

New Zealand and Argentina have "extremely" friendly relations. New Zealand welcomes Argentines with open arms.

NZ has had a working visa program with arg for a while, plus argentines dont need a visa to travel to NZ. There are lots of young argentines working in NZ. I also think its not very hard for them to get residency once their work visa runs out.

NZ is quit happy to take farm workers, and medical staff because we dont have enough, most young kiwis dont want to work on farms, and medical staff can get better money in AUS/US etc, so often move overseas.

As for the argentine farmers, the biggest problem is the gov having their dirty little fingers in the farming pie. They charge an export tax on meat, which from memory is 35%, this is to keep the local prices down and to help inflation, but it also makes it harder for the farmer to make money. If he exports he has to compete on the global market. He can not pass on the 35% tax. So his return is less. And because of the prices controls to keep the local price down, it often becomes uneconomical to farm as there are hugh costs in farming.
All you have to do is look at the amount of meat that is grown/exported from argentina compared to 5 years ago. The last report i saw argentina had dropped from the 3rd largest exporter of meat in 2007 to the 10th last year. Even urugary exports more meat than arg now.

I think the indian farmers would be suckers to come here at this point, unless its for other reasons other than to make money.

 

[Ceviche]

@Davonz,

What would be your take? is it possible to make money in agriculture business in Argentina? of course, general consensus is that its not possible to make any kind of money in any kind of business in ARgentina. But just curious , how are Argentines selling this idea in India.

 

[davonz]

is it possible to make money in agriculture business in Argentina?

I dont know.
But looking at whats happening in NZ at the moment, i would say its becoming harder. An example of this is that NZ banks expect 10% of NZ dairy farmers to be in financial trouble this year due to the falling global dairy prices. Their payout 2 years ago was around NZ$8 per kg of milk soilds. Last year it was NZ$6.30 and they are looking at around $5.40 this year. The problem they have is that the farm input costs have not decreased with the milk payout. Labour costs are still the same, power, feed, vet/heath care.

NZ pays no subsities to their farmers, so it all depends on supply and demand, and the global dairy trade, and at the moment because of china slowing down and europe/USA in the crap supply is greater than demand. The only wee bright spot is - if you can call it that, is that if the USA didnt have drought problems this year production would have been more and the price would have probably been even lower.

So i would guess argentine farmers are in a similar situation, increased costs, decreased payout. The top farmers will probably be making a profit all be it less, the average farmers probably just scrapping by, and the bad farmers are probably in the crap. However, NZ has 1% inflation, and for as long as i can remember its been less than 3% so i would guess farmers in argentina have a harder time with inflation sitting at 30%, and their input costs increasing by around that much each year..

 

[Crema Americana]

I don't buy the argument that Argentines are too lazy or don't want to farm. I think it's probably a more difficult business than people realize... not due to the nature of the work which is a huge sacrifice in itself, but because of the difficulties put in place by part of the government.

My uncle is an olive farmer in Spain - different country, different problems - but lately he doesn't hire anyone to work the land, either. They keep it within the family because of the unfriendly labor laws (hire a lousy worker and if they get sick or hurt, you're stuck with them and perhaps even lose money.) The last person he hired stole two days worth of picked olives, but because they were valued at less than $10 thousand euros it wasn't considered a serious theft and the police basically did nothing. He'd rather let the olives rot on the ground than lose money and break his back trying to pick them all.

Labor laws, environmental laws, taxes/tariffs, blocking of machinery, middlemen monopolies... these all stifle the farming business when they get out of control.

Why they'd bring in people from India when there are plenty of Argentines that need work is beyond me. If it was really a lack of labor, then why not people from other Mercosur countries?

 

[Ceviche]

Why they'd bring in people from India when there are plenty of Argentines that need work is beyond me. If it was really a lack of labor, then why not people from other Mercosur countries?

Like I mentioned, not only Argentina but also Uruguay and Paraguay are heavily wooing Indian farmers.

 

[GS_Dirtboy]

Farming is a tough business, anywhere. Even if you inherited your farm from your mom and pop you will be working your butt off to make the margin. My cousins do it a bit better. They have a combine business in Minnesota. At harvest time they load up the combines and head south to Colorado, then combine their way back up. They are on the road for 4 months, living in a trailer and working basically 24/7. They spend the better part of the rest of the year maintaining their equipment and getting contracts for the next season.

I've been to the farms in Cordoba. Those guys are not uneducated, lazy farmers. There were some of the nicest farms I've seen anywhere.

 

[ElQueso]

I can't see the Indian aspect either. If the Indians had no support from their government in India, I don't see the situation much better here, except that the Indians themselves should be able to grow at least subsistence-level crops with no support, given fertile land and a little bit of rain (hell, they could grow sesame at the very least, which grows in all but really big droughts - that's what most Paraguayan subsistence farmers grow) although the subsistence-level crops don't really provide much in the way of nourishment or profit. And maybe driving the price of sesame down and causing another economic problem in Paraguay, this time for the poor who depend on sesame to make a piddly 500,000 guarani a month average (about $100 USD):

The price of beef rose significantly in Paraguay over the last couple of years as Argentine export policies drove a lot of beef providers in Argentina out of business as they sought better profits through soy and such. Argentina started importing beef, some from Paraguay (not a small amount) and the market opened up for Paraguayan ranchers who sold the remainder of their beef, that wasn't already exported or sold locally, to Argentina instead of locally. Prices had to rise locally to compete with the new export market. Beef is still relatively cheap for people like us who post here, but to poor Paraguayans it made things more difficult. Meat was already not a part of the everyday meal for poor folk.

As far as results of importing Indian farmers, seems like the Indian farmers would be better off than they were in India and the Argentine government would be out some land but the net effect would be a batch of new poor immigrants into Argentina with little to no economic effect overall. I might be missing something.

If the market was freer, farming would be more efficient, more profitable. Central control simply doesn't work, particularly given the people attempting it.

 

[PhilinBSAS]

Soya doesnt need a large workforce. I thought that small farmers were still being thrown off the land after decades of transformation and concentration into large agrarian landholdings - now agribusinesses - making much money out of soya exports. Beef rearing required many more workers. Most recently I read this piece in the Argentine Independent which seemed to have a ring of truth and which matches other press reports.

So is this publicity for Argentinian soya monoculture or just posturing from the current Government who are keen to be making alliances with emerging economies - in fact you could say curry favour with the BRICS?

http://www.argentina...taffairs/62260/
Agribusiness as Usual: The Death of Peasant Farming

by Hugh Davies, 31 October 2012.

 

[ElQueso]

Good point - I bet it's publicity/posturing that won't come to anything.