Argentine farmers’ new beef

The soya bean could provide the answer for country’s under-pressure farmers.

Butchers like Juan Aguilar say the government is
playing politics with their livelihood

Argentina is the world’s biggest consumer of beef per capita and the meat is a matter of national identity.

The average Argentine consumes about 67 kgs of beef per year, compared to the US in second place with 45kgs, and Brazil in third with 32kgs.

But after a 2006 ban on all beef exports in order to stop domestic price rises, many farmers turned to the soya bean as a profitable alternative, especially with taxes on cattle sales remaining at up to 35 per cent.

And, in an industry in which more than two million Argentines out of a population of about 40 million work, the switch to the soya bean is not just a question of economics, but also of identity.

Romantic history

There are 55 million cows in Argentina and beef is half the price of poultry, compared to the rest of the world where, on average, it is five times the amount.

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Cattle ranchers, or “gauchos” as they are often known, have a special place in the hearts of many Argentines.

Gauchos have roamed Argentinian grasslands since the 18th century and played an important role in the history of the country.

But now many gauchos blame the government for having to give up on the idea of farming cattle alone, and must instead look for more profitable sources of income.

“I chose soy because it’s more profitable and it fits perfectly in a rotation scheme we have for the land with wheat and corn,” Andres Rosenberg, a rancher based in Buenos Aires, tells Al Jazeera. 

“It’s a six month cycle. It implies a lot of working capital, but with a faster turnover than cattle farming.”

Today Andres says the ratio of cattle to agriculture farming of which soya is a large part, is 50:50, but five years ago it was more akin to 80:20.

Soya dream

“The soy bean is now for Argentina what oil is for Saudi Arabia,” Miguel Cloquel, from Argentina’s Beef Promotion Institute (IPCV) says.

“Today the best area for producing cattle is now 90 per cent soybean. Five years ago, the proportion of land used for beef and soybean was 50:50, but now it’s 75 per cent soybean.”

The land Cloquel refers to is Pampa Humeda, or “Humid Pampa”, fertile grassland which covers at least 600,000 sq km including the Buenos Aires province.

“The people there are not very happy because it is not very profitable to breed cattle,” Marcelo Fielder, a beef expert at the Argentine Rural Society (SRA), says.

Speaking at the International Meat Conference in Brazil earlier this year, Fielder said that “in the last ten years, livestock-raising has lost eight million hectares of the Pampa Humeda, virtually all to soy”.

“Soy production can bring 400 – 500 pesos per hectare, but cattle farming brings in only about 100 pesos ($31) per hectare,” Fielder said in an interview this week.

Beef is a part of Argentine national identity

As a result, “there is a competition for land between soy and beef,” according to Carlos Vuegen, general manager of the IPCV, and beef has somewhat lost out.

Livestock-raising has moved to the outlying regions of Argentina, where productivity has increased, but the quality and area of land in which cattle is farmed, has been reduced.

The IPCV’s Cloquel said: “Now, beef production is of a lower quality … We produce more than five years ago, but with less land.”

Electoral issue

While 20 per cent of Argentina beef is exported, 80 per cent is consumed at home, which makes inflated prices and regulations on domestic goods such as beef an electoral issue for Argentinians. 

“All regulations play against [Cristina] Kirchner in the election,” Fielder has said.

Juan Aguilar, a butcher from Buenos Aires’ San Telmo district says: “The government has tried to implement a price accord, with beef and other products. But everything they’ve said about price agreements is for one reason, and that reason is Sunday [the election].”

“The government aim to put price restrictions on 10 types of beef cuts, which is something I can’t afford to do,” Aguilar says.

“So I’d have to sacrifice the price of other cuts to justify the increases on the other pieces.”

At present, about 500,000 tonnes of beef are exported within the restrictions on beef exports. Cloquel says Argentina could export 750,000 tonnes without export restrictions.

But as a consequence, both the SRA and IPCV say domestic prices could soar, forcing more price restrictions on people such as Juan.

Vuegen said: “We hope to see another vision for exports. We hope to see exports improve.”

Many Argentinians, as Fielder says, see “the price of beef is a political problem for the government.”

And if the new government fails to reconcile Argentines with their beef, they may become more famous for their soya beans than their beef.

Source : Al Jazeera


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