The real crisis of Argentina's agricultural sector

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The real crisis of Argentina's agricultural sector
The real crisis facing Argentina stems not from the tax hike but from the phenomenal expansion of corporate farming of genetically engineered soybean, says Carlos A Vicente.
ON 11 March 2008, the Argentine government established an increase in the retention tax on soy exports, raising the rate from 33% to 44% and applying a series of adjustable rates that vary according to the international price of soy. It did not take long for the soy producers to respond.

The declared objective of the increase in the tax was to assist the government in its attempts to redistribute wealth while at the same time attempting to halt the advance of soy monoculture and to use these funds to encourage other production. A few days later four entities representing the agricultural sector (among them Confederaciones Rurales Argentinas, Sociedad Rural Argentina, Confederacion de Asociaciones Rurales de Buenos Aires, and La Pampa y la Federacion Agraria Argentina) that comprise different sectors of the soy producers (from the large landholders to the medium and smaller producers) came together to launch an agrarian lockout, blocking the principal transportation routes for food and provoking a serious problem because of the resulting food shortages. The only demand of these protests is for the elimination of this measure. Together with the protesters, the powerful communication media tied to these business interests have inundated the news with talk of a 'historic strike' and of the return of the cacerolazos (street protests). These protests are in fact a far cry from those heard around the world in December 2001.

In spite of the president's invitation to an open dialogue, the rural organisations have decided to continue with the forceful measure, creating an outlook of uncertainty and instability unheard of in the sector that has benefited most economically in the last few years since the devaluation of the Argentine peso in 2002.

Far from the rural organisations are the farmers' organisations, which are supporting the retention tax but demand an overhaul of the measures that have benefited the model of the 'soy republic' in place in Argentina since the 1990s.

Facing the current crisis provoked by the rural soy producers' blockade, it is worth stepping back and looking beyond the current situation in order to understand what it is about and to be able to look at the problem clearly; in other words, without hiding behind a lone tree in the forest of problems that our society faces. Nevertheless it seems that the advance of the agricultural frontier during the last decades has left us not only without real forests but also without the capacity to see the plethora of ideas that are hidden behind this emerging situation.

Without a doubt, the debate about the necessary distribution of agrarian income or the way of applying the retention tax to large and small producers is part of a necessary process and is owed to Argentine society.

However, in no way can we stop analysing how we have arrived at this situation in the first place, what are the true problems that we are facing and, above all, what are the consequences of a system that has invaded Argentina in only 12 years. This model produces spectacular earnings for some and incredibly serious problems for an entire society that to this day has not responded, being too entranced by the siren song of 'record production levels'.
The advance of soy
It was in the mid-1990s that the Carlos Menem government, spearheaded by then-Secretary of Agriculture Felipe Sol, authorised the cultivation of transgenic soy in Argentina. From that point on, in an increase never before registered in the history of world agriculture, transgenic soy started to invade our land, occupying today more than 50% of agricultural lands.

The imposition of this model with no form of government regulation opened the door for what some researchers appropriately started calling 'a machine of hunger, deforestation, and socio-ecological devastation'1 because of the destruction of habitat, loss of native forests, invasion of transgenic strains, monoculture, environmental contamination, displacement of regional production, concentration of land, and displacement of the rural population - culminating in an explosive combination for which all Argentines will suffer the consequences.

Let's take a look at one of the impacts of this model: the soil situation. It is absolutely essential to be conscious of the fact that given the quantity of soy that we are currently exporting, we are effectively selling one of the most precious natural resources that we possess - the soil. The brutal extraction of nutrients taking place on 17 million hectares of soy that are then shipped off to China or the European Union to fatten their livestock is bleeding our territory, leaving barren land for future generations.

It's not a coincidence that the government has announced a plan of support for agricultural fertilisation at the same time as the increase in the retention tax. What the government does not understand, however, is that there is no type of large-scale fertilisation that can return life to soil that has been exhausted in the way that is currently taking place.

This soil is not the 'property' of the landowners but rather, as a natural resource, as stated by the constitutional reforms of 1994, it is a shared cultural heritage of all Argentines. It is worth remembering Section 41 of the constitution: 'All inhabitants are entitled to the right to a healthy and balanced environment fit for human development in order that productive activities shall meet present needs without endangering those of future generations; and shall have the duty to preserve it ... The authorities shall provide for the protection of this right, the rational use of natural resources, the preservation of the natural and cultural heritage and of the biological diversity, and shall also provide for environmental information and education...'

The same constitution in Section 75 recognises 'the ethnic and cultural pre-existence of indigenous peoples of Argentina' and promises to 'guarantee respect for [their] identity' and 'guarantee their participation in issues related to their natural resources and in other interests affecting them'.

As of today, none of these obligations has been fulfilled by the Argentine state, leaving this as one of the principal internal debts to society as a whole as much as to the indigenous peoples. Not one of the rural entities that are protesting today has done anything to protect these common goods. In fact, they have done the opposite - each producer has advanced as far as he could (including up to the shoulder of the highway) with the green soy desert.
The real winners
Of course the 'fathers' of the model, the large agro-corporations (Monsanto, Syngenta, and Cargill), remain silent and have not issued any statements or opinions, and are not present in the highway blockades.

However, it is these corporations, as Raul Montenegro defines it2, that have made us 'hostages of Monsanto' with the invasion of the transgenic soy that today represents 99% of all soy cultivation in Argentina. While Argentine soy producers were blocking the highways, Monsanto announced on 25 March in New York an increase in their earnings forecast for 2008, citing the strong demand for corn and soybeans and the greater demand for herbicides3, and at the beginning of 2008 they reported that they had tripled their earnings compared to the same trimester of the previous year.4

Evidently they do not seem very worried about the retention tax in Argentina. Neither Cargill, Dreyfus, ADM, nor Bunge are part of the protest, although, as the Grupo de Reflexion Rural5 clearly shows, they are the true exporters and those who stand to assume the costs of the tax.

Some of the largest harvests, which surely are not much affected by a 10% change in the tax, are not even part of the party, such as Gustavo Grobocopatel's Grobo group which does not pertain to any of the entities that came together for the protest and that represent the main segment of soy cultivation in Argentina.

Farmers' sovereignty
The farmworkers' and indigenous organisations have clearly expressed their rejection of this model for more than a decade. In the 'march for the defence of our rights, against life-long labour insecurity, the removal of natural goods, and contamination', which took place on 24 September 2007, they spoke of 'a gradual removal that in a few years will leave us without the bounties and richness of nature. Wealth for them means nature's resources. But for us they are the natural and cultural goods of our people.'6

Now, the Indigenous Farmworkers National Movement (MNCI), consisting of 15,000 families in seven provinces, states with absolute clarity that 'this is an opportunity to redefine the strategies of development as they benefit indigenous farmworkers' agricultural interests, the small farmer who lives on his piece of land, the rural worker. That strategy must include the people most important to the farmworkers' organisations and indigenous peoples; it must assign resources on credit and subsidies that improve the community infrastructure. It must also be productive, providing social services deep in the heartland, stopping homelessness among farmworkers and indigenous families, it must plan the redistribution of the land and the re-population of the farmland, it must guarantee the production of healthy food for the population, and it must centralise exports in the government to regulate internal prices and redistribute income.'7

It is time that we listened to those who have always fed our people and who will continue doing so in the future in spite of the 'farm business' and the pompous speeches by the people 'of the farms'. It is time that we learned to see the forest and to take care of it.
Carlos A. Vicente is head of information for Latin America at GRAIN (, an international non-governmental organisation which promotes the sustainable management and use of agricultural biodiversity based on people's control over genetic resources and local knowledge. He is also a contributor to the Center for International Policy (CIP)'s Americas Policy Program (, from the website of which this article is reproduced. The article was translated from the Spanish for the Americas Program by Eliot Brockner.

1. La soja transgenica en America Latina: una maquinaria de hambre, deforestacion y devastacion socioecologica,

2. Argentina: rehenes de Monsanto,

3. Monsanto eleva meta de ganancias de ano fiscal 2008,

4. Triplica Monsanto ganancias en negocio de venta de semillas transgenicas,

5. GRR,

6. Argentina: marcha por la defensa de nuestros derechos. Contra la precarizacion de la vida, el saqueo de los bienes naturales y la contaminacion,

7. Argentina: no al modelo de agronegocios actual. Exigimos politicas para los campesinos indigenas,

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