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Uruguayan farmers estimate drought losses in 868 million USD and 12.800 jobs

Saturday, April 25th 2009 - 10:42 UTC
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The intense six month drought suffered by Uruguay this summer cost the farming sector an estimated 868 million US dollars and the loss of 12.800 jobs according to a report from the country’s main farmers’ organization. The loss breaks down to 75% livestock; 11% agriculture; 11% dairy farming and 3% citrus plantations.

The report from the Rural Association of Uruguay, ARU, indicates that livestock losses totalled 448 million US dollars including 573.000 calves less that will be missing from future beef exports, Uruguay’s main export item. Improved pastures that will never bloom represented 74 million US dollars.

This can be summarized in 680 million US dollars of future beef exports since the biological cycle to obtain the right weight for sales in international markets has been virtually frozen for six months because of insufficient food and water, said Manuel Lussich, ARU chairman.

Dairy farming losses have been estimated in 92.2 million US dollars without taking into account additional forage costs to cover deficits and maintain production.

As to agriculture, losses have been estimated in 125.5 million US dollars. The lack of rain and soil humidity impeded preparing the land and sowing and producing fields felt the impact in volume and quality yields.

Soybeans suffered the most 70 million USD, followed by citrus plantations, 30 million USD. Rice on the other hand benefited with more than sufficient sun light hours to prepare the land and plant. Similarly with wine as the vineyards crop managed a satisfactory alcohol yield, particularly for early grapes.

As to job losses, Central Bank data processing methodology was used meaning that the drought represented a 1.5% GDP contraction, equivalent to 76 million US dollars which means 12.800 farm hands at an average 500 US dollars monthly.

ARU technicians said the report was “conservative” in estimates since it did not include dead livestock; financial costs and other non planned expenditures to mitigate the impact of the drought.

Finally it was pointed out that if rainfall would had been normal during those crucial months Uruguay’s GDP would have expanded 1.5% equivalent to 1.2 billion US dollars which have been drained from the economy.

ARU chairman Manuel Lussich said that even when the worst of the drought is over in most of the country, the lack of sufficient rainfall persists in certain areas to the north of Uruguay.

Categories: Agriculture, Economy, Uruguay.

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