The new government has a great opportunity in agribusiness. Perhaps the only one. Alberto Fernandez’s economic references have not spoken much in recent days, but two of the most prominent (Guillermo Nielsen and Matías Kulfas) stressed more than once that the priority is to export. And there is a clear leadership of agro-industrial products, which account for more than 60% of the foreign exchange that enters the country.
Based on this, a score of entities representing the main chains, chambers, and guilds in the sector yesterday elevated the president-elect a request to consider elevating the Ministry back to the category of “Agroindustry”. Even though the major decisions with impact on the sector will depend primarily on the portfolio of Economy (or Treasury), having a Ministry of Agroindustry would generate a confidence shock both internally and externally. The world also knows and trusts that with the power of the agro-industrial sector, Argentina should have no trouble getting out of the current impasse.
The tailwind from 2007 to 2009 is gone. The “commodities supercycle” went down in history with more sorrow than glory. The worst legacy was the crack. But he also became aware that it is in everyone’s interest for agriculture to move forward. There are markets, starting with the insatiable protein appetite of the People’s Republic of China, which has become the great vacuum cleaner for soya but now also for all kinds of meat. Three years ago we dreamed of exporting a billion dollars. This year we are going to close with more than 3 thousand, and growing.
In the ranking of foreign currency, income is the first soybean, with three times the second, which is the automotive (although with a negative internal balance, because it imports more than it exports). Maize is almost tied, and then beef. Then, wheat. And then peanuts, barley, wines, legumes, traditional and new pome fruits such as blueberries and cherries. More than a hundred countries around the world receive these products, and when Argentina goes to market, competitors tremble.
Hopefully, Alberto Fernandez will choose a minister of agribusiness who shares this vision. Someone will say, as is sometimes heard, that this sector alone is “not enough”. It is not a reason to punish him, not even to let him go. Rather, we should analyze why so much competitiveness was achieved and replicate the path in all segments of the economy.
And there’s more thread on the reel. The issue of climate change was installed as the main environmental challenge. Global agriculture is in focus. But here a sustainable production model has been developed, which differs precisely because of its low level of greenhouse gas emissions. The world is watching. On Monday, a “Carbon Neutral” initiative is launched at the Buenos Aires Grain Exchange, with the support of all cereal exchanges and inland trade. The objective is to prepare the bases for the emerging market of “green bonds”, financial derivatives of enormous potential.
In fact, the Minister of Agriculture of Brazil, Tereza Cristina, signed last Thursday in New York a memorandum of understanding with the CBI (Climate Bonds Initiative) for the development of the market for green securities in the Brazilian agricultural sector. It seeks to stimulate new sources of financing for the Brazilian agroindustry, promoting sustainable practices and technologies. He spoke of a target of 169 billion dollars and has already started with a sugar mill that obtained 50 million dollars to expand its ethanol production.