Wednesday, October 23, 2013

[biofuelwatch] Analysis: Lack of Crop Rotation Slowly Turns Argentine Pampas Into 'Sand'

Analysis: Lack of Crop Rotation Slowly Turns Argentine Pampas Into 'Sand'
Reuters. October 22, 2013

BUENOS AIRES - Argentina's key resource, its agricultural soils, are
being depleted by lack of crop rotation as soy farming encroaches on
areas once used for corn, wheat and cattle grazing, according to local
experts and a government source.

The loss of fertility is a slow-burning threat to crop yields at a
time when importers are counting on the world's No. 3 corn and soybean
supplier to increase output to help meet the boom in demand expected
over the decades ahead.

The geopolitical stakes are high after Arab Spring and other uprisings
were sparked in part by high food prices brought on by crop crises
over recent years. Argentina is the top exporter of livestock feed to
China, where an increasingly demanding middle class has come to expect
a high protein diet of beef and pork.

On the Pampas farm belt, the trend toward soy at the expense of corn
could rob Argentina of its natural advantage as an agricultural
powerhouse in the decades ahead.

The country's farm sector has long feuded with President Cristina
Fernandez, who was re-elected in 2011 on promises of increasing state
control of Latin America's No. 3 economy.

Her government limits corn and wheat exports through quotas that can
be raised and lowered through the year, dampening competition among
buyers and pushing growers toward soybeans, which are taxed at 35
percent but not subject to export curbs.

That's bad for soils in need of regular corn planting. The stalks left
by corn provide mulch that allows rain to enter the ground. When water
can't sink in, the runoff carries away soil nutrients and makes fields
more vulnerable to summer dry spells.

"Because corn and wheat cultivation is punished by the government,
farmers are forced to cut their risks, focus on short-term profits and
plant soy," said Manuel Alvarado Ledesma, an agricultural consultant
in Buenos Aires.

"If no incentive is provided to rotate crops, Argentina will deplete
its soils, with the weakest areas turning into a sort of sand in a few
years," he said.

Argentina's soy planting area has zoomed to a projected 20.65 million
hectares for the current 2013/14 season from 14.5 million a decade
earlier, according to the agriculture ministry.

Corn seedings are meanwhile projected at 5.7 million hectares this
season, down from 6.1 million in the 2012/13 cycle but well above the
2.99 million hectares seeded ten years ago.

Farmers know that six million hectares of corn is not enough to
balance 20 million hectares of soybeans.

"We want to provide as much grain as possible for our domestic market
and for the world, and we want to do it in a sustainable way. But
unfortunately our government policies do not allow us," said farmer
David Hughes, who manages thousands of hectares in the key
agricultural province of Buenos Aires.

Complaints about government intervention are heard from other business
sectors as well. Fernandez has nationalized the country's main oil
company, cut access to U.S. dollars in a bid to halt capital flight
and increased state spending ahead of the October 27 mid-term
congressional vote.

Annual inflation is clocked by private economists at about 25 percent,
one of the world's highest rates.


Soy takes more out of the soil than farmers can afford to put back by
way of fertilizers. Only 37 percent is restored, meaning that 63
percent of each season's loss remains lost, according to government

"The process of land degradation is a fact," said a government source
with direct knowledge of the problem but who asked not to be

"It is happening slowly in areas of the country with the best soils
and faster in areas with lower soil quality. But it is happening," the
source said. "Over the long term, the country is losing yield
potential. That's the biggest danger."

Corn seeds and fertilizers are about twice as expensive in Argentina
as those used in soy farming, another factor pushing growers to plant
soy on top of soy.

"The soil is getting burned by the lack of organic material left
behind by each corn crop," the government source said.

The area dedicated to Argentine wheat, which is also subject to export
curbs, has meanwhile shrunk to 3.4 million hectares from 6 million ten
years ago. Fernandez caps corn and wheat exports to ensure ample local
food supply and control inflation.

Food prices in Argentina are still up as millers run short of grain to
make bread and other staples due to a miscalculation in the size of
the 2012/13 wheat crop that allowed for an initial rush of exports,
leaving domestic stocks painfully thin.

Officials have hinted at coming modifications to the export curbs as
pressure mounts on the government to come to terms with farmers. The
farm sector is a key pillar of the economy even though it offers
relatively few votes and carries little Congressional clout due to the
low population of the Pampas.

The government will eventually have to face the fact that lower
quality soils will mean lower farm tax revenue.

Locked out of the international capital markets since its 2002
sovereign default, Argentina depends on farm revenue to fund social
programs for the poor, particularly in the heavily-populated Buenos
Aires suburbs.

"The lack of crop rotation will not cause a disaster over the next
five to 10 years, because Argentine soils are naturally very rich,"
the Argentine government source said.

"Over the longer term the physical structure of the soil is being
depleted. The consequences for future generations are unpredictable."


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