News

Production of food rises in S. America

For farmers such as Boris Pisacco in Argentina's vast, fertile plains, the past five years have been boom times as prices for soybeans, wheat and other grains have skyrocketed.

Global food shortages and the resulting climb in prices have opened a window of opportunity for Pisacco and farmers all over South America, and they've made the most of it by producing more soybeans and other grains than ever.

“There's a lot of capacity in Argentina, including a lot of capacity that hasn't been met,” Pisacco said. “We believe we'll be able to help feed the rest of the world.”

South American countries such as Argentina and neighboring Brazil claim some of the world's best farmland as well as low population densities, giving the region perfect conditions for increasing food production, experts say.

That's inspired confidence here that South American farmers can help solve the world's food woes, and farmers are investing in new equipment and expanding the land they cultivate.

The expanding production comes at an environmental cost, however, as farms consume more and more of the available land.

In Argentina, soybeans already cover 42 million acres, about half of all the areas under cultivation in the country and a swath the size of Florida. That's a 150 percent increase over soybean acreage in 1996.

Argentina ranks third in world soybean production, behind the United States and Brazil. All but 5 percent of the soybeans produced in Argentina are sent abroad, principally to China.

Exports of soybeans, wheat and other grains also have fueled the economies of impoverished countries such as Paraguay and Bolivia. Wheat production in Bolivia, for example, jumped by 170 percent from 2001 to 2007, totaling 53 million pounds last year.

“We in Brazil export much more food than we consume, so we can be a big part of the solution,” said Francisco Menezes, a former president of Brazil's National Food and Nutritional Security Council. “We're in a particular situation in this crisis.”

To be sure, food prices are rising in South America as they are all around the world, and inflation has become a major worry.

Just last week, 500 people angry about rising food prices tried to invade a supermarket in the southern Brazilian city of Porto Alegre and were repelled by police firing tear gas and rubber bullets.

In Argentina, economists estimate that annual inflation hovers around 25 percent, with rising food prices among the top contributing factors. Local prices for corn have grown by 41 percent over the past year, while prices for wheat have risen by 56 percent.

Yet the trend also has brought in billions of dollars in export revenue for South American economies and driven the longest spell of sustained growth in the region's recent history.

Governments have amassed tens of billions of dollars in reserves, and unemployment and poverty rates have dropped.

“Argentina has come out on the positive end of these trends,” economist Jorge Todesca said. “But in global terms, Argentina is just discovering its role. The government still sees the agricultural sector principally as a provider of food to Argentines.”

  Comments