Page last updated at 12:47 GMT, Monday, 23 February 2009

Drought sucks life from Argentina's farms

A cow walks across a dried-up river bed in San Miguel del Monte
A lone cow crosses the dry bed of the once-mighty Salado river

By Candace Piette
BBC News, Buenos Aires

A deflated bag of bones, the carcass of a bull, lies dried out on the banks of a river, baked by the sun. Normally green, the prime pastureland around lies silent and dry.

This is San Miguel del Monte, a little over 100km (60 miles) south of Buenos Aires, in the Argentine pampas, the vast grasslands that roll out like an inner sea across thousands of kilometres.

The Salado river, which supplies the local ranches, is now a small stream. Large carp leap desperately in the shallows, trying to find deeper water.

A long-running drought, the worst in 50 years, has exacted a heavy toll and even a brief break in the weather in some areas was unlikely to alleviate the situation.

Cattle ranching has a long history in Argentina and about half the country is used for agriculture.

Carcass of a bull, San Miguel del Monte
After the rains dried up in March last year, 800,000 head of cattle have died

The country's wealth was built on beef, and Argentines are avid meat-eaters, consuming an astounding average of 70kg (154lb) of beef per person per year.

Cesar Gioia has been ranching in the Salado basin for 25 years. He rides a white stallion and is at ease in the saddle as he monitors his herd of 500 cows and bullocks.

"Look, these cows are emaciated. They should be capable of four or five births, but I will need to sell them because there is no pasture. They won't be able to reproduce because they are too thin," he says.

"If I have to pay for food for them I won't make any profit. They will have to go for corned beef because they are in such bad condition," he adds.

Mr Goia's frustration is clear - he is being forced to slaughter the cows that should have generated next year's herds.

This pattern has been repeated all over the country for two years running.

In the first 10 months of last year, 280,000 more cows than the year before were sent to slaughter.

Unviable industry

Even before the drought, Argentine beef was in crisis.

Rancher Jonny Cahers D'Anvers
Our government has an uncontrolled resentment against everything that is farmers and agriculture in general
Jonny Cahers D'Anvers
Argentine rancher

The left-wing government of President Cristina Fernandez de Kirchner has put a limit on how much beef can be sold abroad, where it fetches higher prices.

The intention was to keep domestic prices low for the Argentine public. But the policy damaged foreign trade.

From being the third-largest beef exporter in the world five years ago, Argentina has now dropped to seventh.

Ranchers say their industry is becoming increasingly unviable under the rules.

Last year, the government had to back down after a series of strikes and demonstrations by producers over the export cap for beef and also high export taxes for other agricultural products.

Jonny Cahers D'Anvers comes from seven generations of ranchers. He sold all his cattle because he was making so little money.

"Our government has an uncontrolled resentment against everything that is farmers and agriculture in general," he says.

"They are now artificially using us to provide cheap food for the Argentines. The problem with this is that it is very short term."

For her part, President Fernandez has repeated many times that she is not prepared to offer a complete moratorium on taxes for agriculture.

In reference to the prosperous farming community in a recent radio interview, she said she expected the wealthiest in the land to do their bit to help redistribute income and support Argentina at a time of economic crisis.

Deep recession

Other factors too have led to the decline in the cattle business.

Many ranchers turned to cereal production, particularly soya, which the government encouraged after Argentina's 2001 economic crisis, as a way to bring in more export revenues.

Economist Jose Luis Espert says the drought is a severe blow for the already suffering agriculture sector.

"Because of the drought, GDP for agriculture will decline 5% this year, and in exports Argentina will lose $15bn (10.5bn)."

Rider on Cesar Gioia's ranch
Argentina's once-fertile pampas are withering

All the industries dependent on agriculture in Argentina are forecast to suffer job losses amid factors including declining production, demand and revenues.

The global economic slowdown has already hit hard, with exports of Argentine soya down 40% this year due to falling demand.

By contrast, wheat has been so badly hit by the drought that Argentina's biggest client, Brazil, is planning to buy from other countries because Argentina cannot supply enough.

For cattle ranching, the future looks particularly bleak, says rancher Cesar Gioia.

"I think cattle ranching could recuperate in five years, if all these adverse effects are reversed. But if not...we won't be able to recover and, unfortunately, I think Argentina will have to import meat in 2010."

For Argentine proud of their beef, this is almost too shocking to contemplate.

More than anything, it is a huge indicator of the extent to which the combined blows of internal crisis, falling exports, and drought seem to be conspiring to bring on yet another deep recession.

Argentina declares drought crisis
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Q&A: Argentina farm protests
17 Jul 08 |  Business
Country profile: Argentina
19 Nov 08 |  Country profiles

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