Argentina: Europe’s mad cows complicate agricultural outlook

by Viviana Alonso

Buenos Aires, 18 Jan 2001 (IPS) -- Argentina is expecting high yields this year from its grain crops and an income from agricultural food exports that tops $15 billion, but the crisis triggered in Europe by mad cow disease has made things difficult for the international beef trade.

Argentine authorities have banned the entry into the country of cattle products (beef, sausage, canned meats, viscera, animal-based meal) that originated in Europe, the most drastic measure since mad cow disease, or bovine spongiform encephalopathy (BSE), appeared in Great Britain.

The Inter-American Institute of Agricultural Cooperation (IICA), the Agricultural Engineering Professional Council and the Mediterranean Foundation predicted that Argentina would see $15 billion in agro-exports (grain, oils, meat, wine, fruit and honey) this year, but the forecasts have been clouded by the mad cow question overseas.

Argentina had expected to export from 350,000 to 400,000 tons of beef in 2001, compared to little more than 300,000 tons last year, but the European beef crisis not only sparked a drop in demand - due to consumer fears - but also cut into beef’s international prices.

Argentina’s secretary of Agriculture, Livestock, Fishing and Food, Antonio Berhongaray, said it is “quite difficult to determine in the short term the economic impact of shrinking consumption resulting from concern about the causes of the disease.” The human version of BSE is known as nvCJD (new variant Creutzfeldt-Jakob Disease).

But the official did acknowledge that the value of one ton of the so-called “Hilton quota” (the 28,000 tons of beef Argentina sends to Europe annually) “has fallen by approximately $1,000-1,100.”

Berhongaray spoke with the media shortly before leaving for Europe to promote Argentine beef for markets there. He has support in the task from noted Argentine sports figures, such as former tennis star Gabriela Sabatini and footballer Gabriel Batista, who have been named honorary ambassadors of trade.

Argentina’s government, under President Fernando de la Rua, has expressed optimism because official studies indicate that BSE in Europe will benefit Argentine exports, but livestock producers and farmers here hold a different interpretation.

“In the last few years, we had many record-breaking harvests, but the money did not reach the farmers’ pockets. The production costs and taxes we face perpetuate the problem of low profits,” Ricardo Grether, secretary of the Argentine Rural Confederations, told IPS.

“Even when the international commodity prices improve, our profit margin is going to remain very low. There might be a certain feeling of relief, but not well-being,” he added.

The Argentine Rural Confederations and other farming entities emphasise that, as far as BSE, it is essential to maintain Argentina “among the four healthiest countries as determined by the international health bodies.”

Grether said representatives from farming organisations met with Berhongaray to demand that the government prioritise prevention of the fatal disease, which affects cattle and can be transmitted to humans who consume beef or its derivatives.

The farmers and ranchers are calling for stricter controls over the entry of cattle from all of Argentina’s neighbouring countries, where producers may have purchased semen and ovum originating from animals in Europe and which could thus constitute a vector for transmitting the disease in South America.

The complex panorama for the livestock industry contrasts with that for wheat, soya or maize - crops that experts say could near the largest yields in Argentine history, recorded in 1997, of 67 million tons. The export total of these grains for 2001 is expected to reach 45 to 50 million tons.

Of the nearly 65 million tons the Agricultural Engineering Professional Council predicts for the total 2000-2001 harvest, 36 million will be cereals and 29 million will be oil-producing grains. The IICA and the Professional Council, which estimate farm exports to rise from $13.3 billion to $15 billion, also agree that grains will provide more than a billion dollars of the increased export income. This is due not only to the high yields predicted but also to the rising international prices and the recovery of the euro against the dollar.

But farmers insist that there continue to be a great many obstacles to improving their profit margins.

Soya, for example, with exports surpassing that of petroleum and representing $3.5 billion annually (15.3% of Argentina’s total exports), could still grow 10% more in the edible oils sector if it did not have to confront so many obstructions at home and compete with subsidies overseas.

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