Farmer Focus: Low prices and less investment mean tough year ahead

The current year will bring some serious challenges for farmers in Argentina, and many face January in low spirits.

Many issues have been left unresolved by our government, such as the elimination of export permits, declining retention export tax, the return of VAT balances, the enactment of the law on plant protection, preservation of futures markets, improved logistics and the streamlining of customs controls.

See also: Read more from our arable Farmer Focus writers

These problems have worsened along with a complex climatic situation and the disappearance of the “cushion” of high international grain prices. All the while, the world moves forward and our export destinations are occupied by others.

Unfortunately our short-term schedule is survival, when the agrifood industry worldwide is on the way to discuss free trade, open new markets, sustainable development and investments on infrastructure.

Before the collapse of prices due to a strong harvest, the government should have helped farmers by compensating them for the high cost of haulage or giving special loans.

Meanwhile, rising inflation and exchange differences have generated negative expectations and the results are seen in falling investment and uncertainty in gross margins for different crops.

The most obvious example is in soya bean crops, where many farms did not use herbicides for weed control last winter.

Low prices translate to less investment in technology and fertilisers while mortgaging our most valuable resource – the soil – which we have an obligation to take care of for our future generations.

Federico Rolle

Federico Rolle farms 2,250ha of rented arable land in the Pampa area of Argentina. He grows soya beans, sorghum, maize and wheat using no-till techniques and GM crops. He has a part-time role helping Brown & Co in the region.

This is Federico’s last column from Argentina. Next month, we will be introducing a new farmer commentator from South Africa.