By Fernando Bertello– The nation
The late former president Carlos Menem left a mark on the agricultural sector when he was in charge of the Executive Branch. A footprint with favorable policies for what they meant for the evolution of production and exports in the field. However, his policy in general was also criticized for the drop in the number of producers that became visible at the end of his term.
Withholdings
Export duties, the key point for which production entities always claim, were eliminated for all cereals and were reduced for oilseed grains.
“As of 1991, in the framework of stabilization efforts and with a view to providing the economy with greater openness, export duties were eliminated on all cereals, while soybeans and sunflower seeds continued to reach an aliquot of 3.5% throughout the decade (oil and flour of both products were taxed at 0% to leave the country). This policy was accompanied by a removal of a large part of the obstacles to free agricultural trade “, says a report of the Rosario Stock Exchange on export rights at different times in the country.
The aliquots that remained for the soybean and sunflower grain were to help the oil industry in milling and adding value. Millionaire investments were made. Oil grain industrialization plants are mostly concentrated in Greater Rosario. Of a processing capacity of 209,000 t / day surveyed in 2019 at the national level, 80% was in the plants in that region.
Reduced export duties there was a jump in both production and exports. From 1992 to 1999, exports of primary products jumped from 3,500 to 5,145 million dollars. Meanwhile, sales abroad of Manufactures of Agricultural Origin (MOA) rose from 4,829,8192 million dollars.
Dissolution of the National Board of Grains
The National Board of Grains to intervene in the market (among other functions, it bought wheat to sell to the mills at cheaper prices, although with a high fiscal cost for the State) disappeared with Menem. In this, the decree of economic deregulation 2284 played its role, which took out both the National Board of Grains and that of Meat.
“The National Board of Meat and the National Board of Grains intervene in different ways prior to the export of meat and grain respectively and after the import of said products or their derivatives and in the process of production and marketing of these products in the internal market, taxing these activities in different ways, which is incompatible with the spirit of this Decree, also entailing the need for the dissolution of the aforementioned entities with the consequent transfer of police activities to the respective centralized and decentralized agencies “, it said in his recitals, he decreed that he put an end to those organisms.
Supplies
Menem removed barriers and tariffs for the importation of key products for the sector such as fertilizers. From being minimal, fertilization began to grow as a practice with an effect in the following years. “With this, the input-product ratio improved remarkably and caused it to increase from practically no fertilization,” added Regúnaga.
Transgenic soy
In 1996, with Menem president and Felipe Solá as Secretary of Agriculture of the Nation, the approval of transgenic soybeans made way for planting in the country. Before that, in 1991 with Regúnaga the National Advisory Commission for Agricultural Biotechnology (Conabia) was created to provide a framework for the use and approval of transgenics in Argentina. The National Seed Institute (Inase) was also created in 1991, which supervises the seed trade.
meats
For foot-and-mouth disease, a disease that has always been considered an obstacle in the markets, in 1990 an eradication plan was applied that made it possible to cut the circulation of the virus using an oily vaccine with high immunity. In 1997, the International Organization of Epizootics (OIE) declared the country free of foot and mouth disease with vaccination. In April 1999, Menem gave the last vaccine in a field in Córdoba. Vaccination was stopped despite the fact that there were experts who did not recommend it. In 2000, with Fernando de la Rúa as president, the country was recognized as free of foot-and-mouth disease without vaccination, but within a few months new outbreaks were recorded that led to the closure of markets.
In addition to the plan to eradicate foot-and-mouth disease, a commercialization program for meat cuts was worked on that had a good momentum in the beginning, although it was later put aside.
Mercosur
The signing of this agreement brought good news for wheat. It signified Brazil’s purchase preference, since a common external tariff (today 10.5%) was set for wheat from extra-bloc countries. More than 80% of the purchases in Brazil became Argentine wheat. At that time, opportunities also opened up for milk, rice and other products from regional economies.
The criticism that has been made of Menem’s policy is that in the countryside it had an effect of greater concentration of land in fewer hands and that thousands of producers ended up with high levels of debt. Strictly speaking, many cite the comparison between the 1988 and 2002 agricultural censuses, the latter registering 100,000 fewer farms, although many producers went from producing to renting their land to others.
“With the exchange rate anchored, competitiveness was lost due to high public spending. Public spending was not modified in such a way that the Convertibility plan could survive,” says expert Ernesto Ambrosetti. Menem highlighted the “intelligent economic opening”, economic stability, accessible credit and long-term vision, among other factors.
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