Mixed fortunes for Argentinas farmers

27 July 1998

Mixed fortunes for Argentina’s farmers

ARGENTINAS agricultural sector experienced mixed fortunes in the past year, reports the Financial Times in a special survey on the countrys economy.

Plentiful rain brought by El Niño led to a record 65 million-tonne cereal harvest, a 23% increase on last years bumper crop. But the rains also brought catastrophic flooding which meant losses estimated at $1.5 billion (£905m) in rice, cotton and tobacco and beef.

The losses in livestock were valued at $450m, severely damaging the countrys hopes of becoming a leading exporter of fresh beef.

Cereal exports and export earnings are also down for the first time in a decade, despite an increase in production. A drop in commodity prices left a shortfall in earnings of $10.5bn.

A drop in prices has been further complicated by lower demand and shipment delays inspired by the Asian market crisis. Argentina also finds itself at a competitive disadvantage from the devalued Asian currencies if it chooses to export.

But all is not doom and gloom. Investment in the sector reached $10bn in 1996 and is expected to reach a similar level this year. Much of this is foreign investment attracted by Argentinas abundance of cheap land and high commodity prices in recent years.

• Financial Times 27/07/98 page 14 (Argentina special survey)