MercoPress. South Atlantic News Agency

Lavagna paints rosy picture of Argentine agriculture

The value of Argentine farmland increased 210% in the last four years and grain production 116% between 1993 and 2005, revealed Argentine Economy minister Roberto Lavagna during a meeting with farmers.

"Liquid capital for the agriculture sector expanded 60% in the last four years and the real value of farmland 210%. When the value of capital jumps, it's because profit yields are undeniably strong", argued Mr. Lavagna.

The Argentine Economy minister has come under strong criticism from farmers associations for having extended export taxes on cereals to dairy produce and for threatening something similar for the livestock sector.

Argentina's main farm lobby the Argentine Rural Society claims President Nestor Kirchner's administration "is indifferent towards farmers' plights".

Mr. Lavagna also turned up to the meeting with statistics showing that the area planted between 1993 and 2005 expanded 46% and grain production increased 116%.

"With the strong peso of the nineties, and without export taxes, 88,000 farms were lost, and this has clearly changed", underlined Mr. Lavagna who added that in the last three years, agro business created 400.000 new jobs.

And this happened "in spite of the fact that international prices have been lower than those in 1996/97, which means the current expansion was not promoted by higher international prices".

However Rogelio Ponton from the Rosario Stock Exchange argued that agriculture's income this year will drop a billion US dollars compared to 2004.

Economist Jorge Ingaramo pointed out that the last wheat and corn crop output was exception because of the excellent climate, "but farmers just managed to meet ends given the increase in costs".

Export taxes on booming Argentine grain sales has become a significant source of revenue sources helping Argentina achieve a considerable primary budget surplus.

However as the derailed Argentine economy of 2001/02 returns to normal, profit margins are shrinking and the farming sector is demanding lower taxes.