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Drought threatens Argentine farmers and the economy

The worst drought in 20 years is wracking Argentina, stalling the country’s conflict-ridden farm economy just as the government needs agricultural export income to protect its budget surplus at a politically troubled time.

The National Meteorological Service says nearly every part of Argentina is experiencing drought conditions — ranked as “extreme” or “absolute” in most areas — that already have killed thousands of cattle and withered crops.

The damage is worst in the country’s northern farm belt, which for decades has produced the bulk of Argentine agriculture, fueling the nation’s growth.

“There isn’t enough food for animals to graze and there are water shortages for the population,” National Meteorological Service spokeswoman Susana Gordillo said on Saturday.

“The panorama doesn’t look like it’s going to get better,” she said.

Argentina is among the world’s top four exporters of beef, wheat, soy and corn, and sagging output could not only cripple the local economy, but boost already-high world food prices.

About 4.5 million hectares of wheat are now growing nationwide, 19 percent less than last year, and the smallest amount since 1974, the Buenos Aires Grain Exchange said in a report.

Local newspapers are already comparing the dry spell to a severe drought that swept the country in the 1988-1989 growing season, killing crops and slashing exports amid a domestic economic crisis that included 5,000 percent hyperinflation.

This year, economic losses in the farming provinces of Buenos Aires, Santa Fe, Corrientes and Rio Negro have already reached US$293 million, and wheat and corn-related losses could top US$700 million nationwide, according to an estimate by the Buenos Aires-based La Nacion newspaper.

The paper said that in many spots, annual rainfall is now 20 to 30 percent below its normal level.

Argentina’s powerful farm sector hit the economy earlier this year with a four-month series of strikes, as grain farmers suspended shipments to protest an export-tax hike decreed in March by Argentine President Cristina Fernandez to boost government revenue.

Exports and tax income fell during the protest and the government was forced to back down on the tax plan.

Fernandez’s approval ratings dipped to near 20 percent in several July polls.

Now, nature, not politics, is threatening Argentina’s fiscal strength.

Agriculture Secretary Carlos Cheppi has vowed to give drought-stricken ranchers and farmers cash assistance, but for some, it wasn’t enough.

“The drought is wreaking havoc, and government help is minimal,” said Eduardo Buzzi, president of the Argentina Agrarian Federation, which helped to coordinate the farm strikes this year.

Meanwhile, 30 percent of wheat crops have dried up in Buenos Aires province, said Agrarian Affairs Undersecretary Fernando Vilella, and 40 percent less wheat and 25 percent less corn is growing in Cordoba province, the Cordoba Grain Exchange said.

Only areas immediately around the capital and far-flung parts of the Andes, Tierra del Fuego and areas near northeastern Iguazu Falls, are enjoying “regular” rainfall, the meteorological service said.
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