MercoPress. South Atlantic News Agency

Argentine farmers anticipate dismal crops except for soybeans

The Kirchner couple farm policies have distorted agriculture

Argentina’s farmers will be investing 4.878 billion US dollars in the 2009/2010 crop season which represents a drop of 32.6% compared to the previous cycle according to different farmers organizations quoted this week in Buenos Aires media.

The plunge in investment can be attributed to a lesser planted area because of climate factors and the instability of world markets, plus the uncertainty triggered by the “adverse policies” from the Argentine government, indicates a report from the powerful Rural Association.

Another factor is the fall of up to 60% in the price of fertilizers and phyto-sanitary products following a huge surge during the previous crop.

Argentina one of the world’s bread baskets will be sowing 28.85 million hectares which is 5% less than for the 2008/09 crop.

“It’s the first time since the beginning of the century that we will be seeing a fall in investment indicators” according to Ernesto Ambrosetti, head of Economic Studies from the Argentine Rural Association.

“Investment and area planted diminish because of the international market volatility, the drought, lack of capital and the strong interference from government which eliminated transparency from markets and the farmer has no clue of what are the conditions when he is ready to harvest”, he is quoted by La Nacion from Buenos Aires.

Nevertheless the soybean area will increase 7% compared to a contraction of 33% for wheat, 24% for corn and 15% for sunflower, points out the report, one of the four associations involved in the long standing controversy with the Kirchner administrations over export taxes.

Argentine farmers have been in conflict since early 2008 disputing the government’s intentions of over taxing, limiting exports and controlling domestic prices.

Argentina that is the world’s third producer of soybeans is forecasted to invest 3.276 billion US dollars for this coming season’s soy crop, which is 67% of the total estimated for all 2009/2010 harvests. Most of Argentina’s soybean crop is exported and the country is the world’s leading exporter of soy bean oil and pellets.

The overall 2009/2010 harvest is expected to range between 80 and 83 million tons of grains, 20 million less than in 2008/09, according to the Cereals Exchange of Rosario and private consultants. Argentina could be forced to import wheat for home consumption for the first time in a century.

A report from the Cereals Exchange says that Argentine exports of grains and oil seeds during August dropped considerably compared to July.

Volumes shipped were down 19.8% equivalent to a 20.7% drop in revenue while prices slumped on average 1.2%. However compared to August 2008, prices are up 4.4%; shipped volumes down 51.4% and in money terms 49.1%. As to the sale of foreign exchange earned with exports they were down 17.4% over July and 48.1% compared to a year ago.