The Boom of Pasturelands in Argentina

The Boom of Pasturelands in Argentina

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The Boom of Pasturelands in Argentina

Over the past years, Argentina has experienced a complete reassessment of the pasturelands throughout the country. The boom of pasturelands in Argentina includes an expansion of diverse uses for agricultural production, rural development, mining, and ecotourism.  depending on the territory’s climate, topography, and production activities. This has led to significant demand from both national and foreign investors. Consequently, pasturelands are gaining in value more than ever before in history.

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    Due to the introduction of the latest technology, now there is a transformation from a family farming model to a large-scale business farming model, leading to high productivity. However, this new type of farming has a direct impact on the environment and biodiversity, such as erosion and soil degradation.

    In general, Argentina has the following land organization: the Province of La Pampa has the most balanced distribution, where the planted areas expanded from 13 million hectares to 20 million hectares in 10 years (devoted mainly to oilseeds and cereals). Consequently, forage production has dropped considerably in this region.

    On the other hand, the Patagonian region has the highest concentration of single-use, which is natural pasturage. In fact, there are many farms less than 100 hectares in size devoted to fruit-growing activities in the irrigated valleys, as well as extensive livestock operations.

    It is worth noting that the amount of government-owned land remains very large in Argentina, although it varies by province and by region. Patagonia is the region with the most government-owned land, especially in the provinces of Neuquén, Río Negro, and Chubut.

    As a consequence of the global rise in food prices, there has been an increasing interest in agricultural goods, land use, purchase, and leasing of pasturelands. For example, one hectare of land in a livestock breeding area was worth US$200 two decades ago; now, the same area costs US$1,800. This is a general phenomenon throughout the country since the prices of land in the North-west, coastal, and cordilleran areas have risen by up to 300 percent.

    The Boom of Pasturelands in Argentina

    Within the dynamic of land transactions, one of the main problems of small-scale producers is the lack of access to enough land to produce food on a profitable scale. There are different categories of ownership in this group. For instance, those who own a formal property title to land. That is, the land was acquired by means of a real estate transaction, or received under a government-owned land grant. Others have a precarious tenure. In this case, they experience a high level of uncertainty since they can be evicted at any time. The last group settles on land in demand by other private owners who hold the property title, and are not interested in exercising possession of usually unproductive or underemployed holdings.

    As regards medium-scale producers, some of them remain stable. Others increase their amount of land by purchasing small plots or farms to incorporate into their already functioning production systems either to scale up their operations or to hedge their capital against inflation. On the other hand, others choose to sell their land; and some lease their land.

    Similarly, large-scale producers often remain stable. O others subdivide the land among family members, and others sell their lands under different types of arrangements.

    An emerging option within the agricultural industry is sowing pools. They operate as companies, trusts, or other legal entities. They produce either for export or domestic consumption.

    Pasturelands in Argentina

    Even though Argentina is well known around the world for the high quality of its agricultural and livestock production, the government very often fails in promoting these industries. For example, there is a significant lack of clear policies regarding the use, treatment, and development of land. There are contradictions between the legal framework at the national and provincial levels. Even more, especially in many provinces, there is an urgent need for a reliable and updated cadaster information system. This can avoid an informal market for land. The implementation of this system would certainly prevent bureaucratic procedures. Also, the unnecessarily high costs related to the management of land.

    In fact, some provincial governments have constantly supported rural development. They are based on a business model rather than family farming. This allows the sale of large parcels of government-owned land to large companies. As a result, the medium and medium-to-large capitalized farming sector is consolidating and growing. These farming operations feature high levels of technology and production capacity.

    In conclusion, due to the more robust demand for land, natural resources are becoming increasingly strategic. Therefore, it is essential to focus on environmental issues. For example, deforestation, introduction of exotic species, soil and water pollution, desertification, the loss of biodiversity, etc.

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