Change on the Pampas: Industrialized Farming Comes to Argentina

The agricultural sector that is emerging has fewer, bigger, more industrial farms. It relies on imports of pesticides more than ever. And the quality of its famed meat is being traded for cheap production. It is a trend that will be difficult to reverse. Cattle farming takes such a large up front investment that once a farmer sells his herd, it is hard to get it back. Historically, Argentines have treated cattle as walking bank accounts—the word for the industry, ganaderia, shares the same root as the verb “to earn.” For many farmers, the bank is broken. They are now fully dependent on the volatile international prices of soy and other crops.

Nicholas Kusnetz

Outside the town of Villegas, in the western Argentine Pampas, the land appears as a tri-colored patchwork in mid-summer. There’s the deep green of corn leaves, the lighter green soybeans, and the straw colored stubble of corn stalks that have been sprayed with pesticides after harvest. That’s just about it for as far as the eye can see, which in this case is far. The land is flat—it rises 25 centimeters for every kilometer as it reaches the foothills of the Andes. But if you’re familiar with how this land has looked for decades, you realize there’s something missing: pasture.

For the better part of the last 60 years, these lands have been worked in a rotation of grass and grain, with the sun as the system’s main fuel and cattle as its central engine. Leguminous grasses like alfalfa fix nitrogen into the soil while converting sunlight into a rich diet for the world-famous herds, which produce some of the most coveted meat in the world. The system anchors the region’s sandy soil. As the cattle graze, their manure returns much of the fertile soil’s nutrients. Then, after a few years of grazing, the land can be rotated back into crop production, since the pasture’s deposit of nutrients will be able to sustain a couple of years of crops. The system also gives farmers two sources of income, grains and cattle, protecting them from price shocks in either market. This coexistence produces one of the largest scale practices of sustainable agriculture in the world.

Yet outside Villegas, the cattle and the grass are being removed from the system. The biggest herd I saw was packed into a feedlot with capacity for 10,000 head. Across the more than 120 million acres of the Pampas, grass is being torn up and the land planted in genetically modified soy. The cattle are being pushed into feedlots or sent north and west to lands too poor to grow crops, just as happened in the U.S. corn-belt decades ago. And, as in the United States, as the cattle move out, industrial farms growing fewer and fewer crops with more and more pesticides and fertilizers are taking their place. The very nature of Pampean agriculture—which along with the gaucho myth lies at the heart of Argentine consciousness—is changing.

“Having shipped the last cattle and sprayed the last alfalfa field, I have decidedly changed course,” said Max Van Tuyll, a farmer with 6,600 acres about 70 miles south of Villegas. Van Tuyll’s herd has dwindled to some 350 head, down from about 3,000 a few years ago. He said he has been pushed in this direction by forces out of his control. Markets, technology, and the government—especially the government, he and all ranchers say—have made his decisions for him.

A group of activists and academics blame this “soyazation” for a legion of problems, including the loss of small and mid-sized farms, deforestation in the north, and soil depletion and desertification in the Pampas. Meanwhile, the country’s farmers are becoming more dependent on fertilizers and pesticides.

The U.S. Department of Agriculture predicts Argentina will produce 51 million metric tons of soy this coming harvest, more than twice what it did a decade ago. Meanwhile, the country’s beef production has more or less held steady, and many expect the beef-loving nation to be importing meat from Brazil or Uruguay within a couple of years. And about three in ten cattle are finished in feedlots these days, a practice rarely if ever seen in the past. This shift has been in the making for more than a decade, but in farmer’s eyes, it has taken on urgency in the last year and a half, as the country’s First Couple has stoked Peronist animosities and divisions between the country’s rural and urban sectors.

The “soyazation” has been an undercurrent in the ongoing tension between Argentina’s farmers and President Cristina Fernández de Kirchner. In the spring of 2008, Fernández, who followed in the policy footsteps of her husband and predecessor, Nestor Kirchner, sought to raise export taxes on grains and soy above the then current rates, which were already as high as 35%. The move sparked months of protests by farmers, who blocked off highways and halted sales, leading to food shortages in the cities. The revenue from the tax hike was supposed to go primarily to the urban poor. But months after the president raised the taxes, the Senate voted them down, leaving the rates at their previous levels. Throughout the debate, the president’s popularity declined. And while she gave up her bid to raise taxes higher, she has not given in to other demands including a call to lower the soy tax below 35%. Fernández’s ruling party lost its majority in June’s Congressional elections and many hoped that a humbled president might back down.

Most recently, the legislature passed an emergency relief bill for farmers in parts of Buenos Aires province, which has been hit particularly hard by prolonged drought. The measure included a temporary lifting of export taxes, but the president used a line item veto this week to remove the tax relief. In response, farmers groups announced a week-long halt to all grain sales beginning on Friday.

Though the tax hike started the protests, it was simply the final step in a systematic policy of using the wealth and bounty of the agricultural sector, by far the country’s largest exporter, to promote Peronist politics. Since they began instituting price controls on beef four years ago, the Kirchners have essentially used the rural sector’s outsized role in the economy as a political tool. The average Argentine eats more than 150 pounds of beef per year—the Sunday asado is practically seen as a national right—so people pay attention the price of meat. Before the midterm elections of 2005, Kirchner instituted slaughter weight limits to try to control prices. This began a series of measures including temporarily shutting off exports before instituting export quotas that remain to this day. On top of these legislative measures, the interior commerce secretary, Guillermo Moreno, muscled down prices more directly as well, said Dario Colombatto, a professor of beef production at the University of Buenos Aires.

“This Moreno guy,” Colombatto said, “would go to the Liniers market,” the country’s main cattle market on the outskirts of Buenos Aires. “Legend goes that sometimes he would put a gun on the desk, as if he was John Gotti… and he would say, ‘listen pal, here’s a list of the prices you have to sell at. If you go beyond that, you’re going to go to prison, or I’ll have you very precisely audited.’” This was not the only time I heard that story.

The result has been that farmers were pushed toward grains and oilseeds, which happened to be in the midst of a market boom over the past few years. But as grain prices skyrocketed, the Kirchners saw an opportunity. Whether you view the effort to raise export taxes as a legitimate attempt to keep food affordable and control inflation, as the government claims, or as nothing short of thievery, as farmers do, the effect of the price controls on beef together with the export taxes on grains and oilseeds has been to squeeze the country’s largest export sector from both sides. On top of that, a severe drought has choked production over the past year, killing herds and shriveling crops.

The shift to soy began in the early 1990s with President Carlos Menem’s liberalization of the economy. He opened the country to the world market, and allowed for the introduction of genetically modified soy, which is cheaper and easier to grow than any other crop. But it was what farmers see as the Kirchner’s war on their sector—one that seeks cheap food and high government income—that set in place this fundamental shift in the way the Pampas are farmed.

The agricultural sector that is emerging has fewer, bigger, more industrial farms. It relies on imports of pesticides more than ever. And the quality of its famed meat is being traded for cheap production. It is a trend that will be difficult to reverse. Cattle farming takes such a large up front investment that once a farmer sells his herd, it is hard to get it back. Historically, Argentines have treated cattle as walking bank accounts—the word for the industry, ganaderia, shares the same root as the verb “to earn.” For farmers like Max Van Tuyll, the bank is broken. He is now fully dependent on the volatile international prices of soy and other crops. While prices are still higher than they were earlier this decade, the global recession has shown how volatile the market can be and how dangerous it is to rely on only a couple of crops. The new Pampean model is built on high prices. When the next boom and bust come, he and farmers across the region will not have their cattle anymore.

“There’s an old Argentine adage,” he told me later by phone. “Once the last cattle have left your farm, they are not coming back.”

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