Rise of soy makes Argentina a mainly one-crop country
Date: 18-Oct-02
Country: ARGENTINA
Author: Damian Wroclavsky
That's double the number of hectares dedicated to the oilseed seven years ago. For the first time since soy was introduced in Argentina, its growth in popularity has sparked a local debate about the risks of devoting so much area to one plant.
"From the agricultural point of view, this growth has its limits and at some point it's going to have to be reversed so that we don't end up as a one-crop country, which would destroy everything we are doing for sustainable agricultural development," said Juan Kiekebush, head of research and regulatory issues at chemical firm Syngenta AG .
Crops must be rotated to avoid sapping the soil of needed nutrients.
Since the 1995/96 campaign the soy crop has grown with dizzying speed in the world's No. 3 producer, which exports at least 95 percent of output.
Farmers planted 11.5 million hectares with the oilseed in 2001/02 - 43 percent of total farming area. Private estimates put planted area at 12.5 million to 13 million hectares in 2002, which would be the seventh consecutive year of growth.
Soy production climbed 141 percent in the last seven years and planted area rose 91.6 percent, according to official data. Such rapid expansion has made the soy processing industry one of the country's top exporters.
In that seven years, which coincided with the introduction in Argentina of genetically-modified seeds that made growing soy cheaper, corn area as a proportion of the total fell to 20.8 percent from 23.8 percent.
Sunflower seed area fell to 5.5 percent of the total from 12.6 percent during the period.
Now some 95 percent of Argentine soy is GM soy, which is resistant to the herbicide glyphosate and allows farmers to eliminate weeds without hurting the soy plant.
"The genetically modified seeds may have helped but the key was the market. Strong world prices for soy and more volatile prices for wheat, corn and sunflower seeds have led to incredible growth (in soy output)," said Kiekebush.
Soy production has also sky-rocketed in Brazil and the U.S. Department of Agriculture expects the combined output of Argentina and its giant northern neighbor in 2002/03 to surpass that of the United States for the first time.
FARMING AND THE CRISIS
Soy's pull has become even greater this year as January's peso devaluation and debt default drastically reduced farmers' access to financing and left them seeking to plant crops with low production costs and strong prices.
"This migration toward soy is a consequence of a lack of credit for crops that require a greater investment in technology, like corn. Soy is a cheaper crop," said Carlos Salvador, head of the Association of Agricultural Technology Chambers.
Betting on just soy leads to a very high risk not only for farmers but also for the country because Argentina could lose markets that it supplies with other grains, he added.
The effect of the decline in sunseed production is a perfect example of what could go wrong, said Kiekebush. "The big drop we've had over the last few years was noticed on the international market," he said.
"If we don't use technology, (sunseeds) are going to stop competing with soy and will disappear; we'll read about it in botany books," Kiekebush added.
Soy is one of Argentina's main foreign currency earners, making it unlikely the crop will be abandoned on any large scale. Yet over-reliance on any one crop could have terrible consequences in the event of a disease or weather problems.
Still, some farmers painted a less bleak picture of Argentina's affinity for soy.
"We shouldn't be afraid of soy in Argentina, it's a blessing," said Victor Trucco, a farmer and the president of the Aapresid, a group dedicated to sustainable agriculture.
The gains soy has made compared to other crops "aren't good, but they aren't tragic. Soy has been in the country for 30 years ... and if you look at how irrationally agriculture is managed in other parts of the world, we are in the best position,