PANNA: Argentina: Industrialized Agriculture and GE


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Argentina: Industrialized Agriculture and GE
February 16, 2001

Herbicide tolerant genetically engineered (GE) soy has been widely adopted by farmers in Argentina as part of a shift towards a more input-intensive, industrialized system of agriculture. Although there may be some short-term advantages, farmers' earnings could drop if GE soy is rejected by importing countries. In addition, farmers in Argentina may find that economic and ecological impacts associated with GE crops and export-oriented agricultural create serious problems in the long term.

Argentina accounts for 21% of the total global acreage of GE crops, second only to the United States. The country produces 10% of the world's soybeans and is the largest exporter of crushed soybean and oil (31% and 36% respectively). The crop and its derivatives account for one fifth of Argentina's export earnings. In 1999, 64% of its crushed soybeans were exported to the European Union.

Approximately 800,000 hectares of Roundup Ready soy were grown in Argentina in 1996. By the 1999/2000 season, more than 80% of the total soybean acreage or 6.6 million hectares had been converted to Roundup Ready. The conversion to GE could adversely affect soy exports because more and more major European companies are making the move to non-GE ingredients.

Loss of export markets is not the only danger facing Argentine farmers. Since 1991, increased industrialization of the agricultural sector, including adoption of GE soy, has had a number of negative impacts.

* Increasing role of transnational companies in the agricultural sector: Industrialization of grain and soybean production has boosted dependence on foreign agricultural inputs. Removal of import tariffs led to the bankruptcy of domestic farm machinery manufacturers. The commercial seed sector has become increasingly controlled by subsidiaries of transnational corporations.

* Declining profit margins: Prices for soybean declined 28% between 1993 and 1999, while prices for gasoline, a vital component of industrialized agriculture, have risen by 26%. Farmers' profit margins fell by half between 1992 and 1999, making it difficult for many to pay off bank loans for machinery, chemical inputs and seeds.

* Concentration of holdings: Between 1992 and 1997, the number of producers in the soybean-growing region of Argentina dropped from 170,000 to 116,000--a 32% decrease--while the average size of a farm increased from 243 to 357 hectares. In this same region, at least 50% of the acreage is managed by third parties.

These dramatic changes in Argentina's agricultural system have their roots in the economic conditions and government policies of the 1980s. In the past, farmers alternated cultivation of grains with cattle pasture in the highly fertile region of Argentina where soybeans are now grown. In the early 1980s, grain and oilseed prices increased while the market for cattle declined. These market conditions, combined with government policies including the government's abolition of export levies on agricultural products, set the stage for agriculture in Argentina to become increasingly export orientated.

Growing oilseed for export created more demand for imports of machinery, pesticides and fertilizers. In a short time, the lack of crop rotation resulted in declining soil fertility and a related increase in fertilizer use--from 0.3 million tons in 1990 to 2.5 million tons in 1999. To combat increased soil erosion, "no till" sowing methods were widely introduced, leading to an increase in herbicide use.

The rapid adoption of Monsanto's Roundup Ready soybean (genetically engineered to be resistant to glyphosate) was the next step in the industrialization of Argentina's agriculture, resulting in even wider use of glyphosate (Monsanto's brand Roundup). Glyphosate is not protected by patent in Argentina. As demand has increased, prices plummeted, making it more attractive than any other herbicide for weed control. Between 1991 and 1999, glyphosate use skyrocketed--increasing from 1,000 to 58,000 cubic meters annually. However, dependence on one herbicide, even glyphosate, increases the likelihood of herbicide-tolerant weeds. Glyphosate resistance has been reported for weeds such as ryegrass under similar conditions in Australia. While this problem has been acknowledged by the government, measures to detect and isolate such weeds have not yet been implemented.

Argentina's present export-oriented commodity production system is likely to drive more small farmers out of business and adversely affect the environment. Diversification that would include growing a variety of crops for export and domestic uses would enhance food security and environmental sustainability. However, this would require a drastic change in Argentine agricultural policy, including subsidies for small farmers.

Source: "Herbicide Tolerant Soybean: Just another step in a technology treadmill?" by Volker Lehmann and Walter Pengue, Biotechnology and Development Monitor. September 2000.

Contact: Walter Pengue, Centro de Estudio Avanzados, Universidad de Buenos Aires J.E. Uriburu 950, 1 piso, 1114 Buenos Aires, Argentina; email wpengue@sinectis.com.ar.

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