Argentine farming disarray seen to affect output

April 24, 2013 at 1:19 PM
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BUENOS AIRES, April 24 (UPI) -- Argentine government policies are affecting agricultural output and are blamed for creating imbalances in the sector, independent data indicated.

Farmers said they expect to plant more wheat this season in response to a government policy review but the wheat harvest is likely to be less than previously envisaged, figures suggest.

A government policy review on Argentine exports of commodities including grain was welcomed as "farmer-friendly" but apparently wasn't enough to effect substantive change in the agriculture sector.

Farmers discouraged by the regulatory environment switched to alternative crops last year, a move seen by analysts as a protest over a long delayed review of export policies.

Current estimates suggest at least 9.6 million acres of farmland is to go under wheat farming, a substantial improvement on last year's 8.9 million acres. But the Buenos Aires Grain Exchange, which released the figures, considers the improvement short of target.

Exactly how much wheat was produced in last year's season remains unclear, as Argentine and U.S. data on the crop differ.

The capital's Grain Exchange and other market data suggest a harvest of about 9.8 million tons. U.S. Department of Agriculture readings are more upbeat and U.S. figures suggest the total output may be around 11 million tons.

Analysts said rising global demand for wheat presented Argentina with a historic opportunity to secure new markets but the growers' ability to meet targets remains a subject of speculation.

The Grain Exchange said its survey of wheat growers showed "a clear improvement in terms of intention to sow wheat."

Added to the growers' ongoing tussle with the government on export policy guidelines, there has been reported disappointment with yields from barley and other crops.

"Poor experience" with alternative crops including barley is now seen as one of the reasons behind farmers' plans to boost wheat production.

The ongoing disarray in Argentina's wheat agriculture is seen by analysts as part of a wider problem, in which the government's inconclusive fight against 25 percent annual inflation continues to be a major factor. Officials have used legislation, persuasion and tough tactics in their effort to control consumer prices, with mixed results.

At present, farmers are basing their optimism on government assurances that there will be no more curbs on wheat exports. Some farmers' representatives were assured the entire surplus of the wheat crop in the 2013-14 season will be allowed for export.

The problem, however, is that the government often decides to give priority to domestic consumers at the last minute to ensure ample supplies at home before allowing exports. The risk of food shortages at home is one the government wants to avoid, analysts said.

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