As drought hammers farms, ag Liaison Board discusses assistance with Massa

The government aims to establish a joint agenda to assist those affected by lack of rain. Soft loans and non-refundable contributions are on the table.

Liaison Board (Mesa de Enlace) leaders have been demanding a meeting with Economy Minister Sergio Massa for weeks, and he will finally see them today at the INTA (National Institute of Agricultural Technology) Experimental Station in the city of San Pedro, in Buenos Aires province. The meeting will focus on the drought and the need to establish assistance mechanisms for affected farmers, since the climate phenomenon is complicating not only extensive farming but also livestock and regional economies.   

The morning meeting will also include the Secretary of Agriculture Juan José Bahillo, who in recent weeks has been very active in closely monitoring the impact of the drought and declaring an agricultural emergency in several areas. Authorities from the Investment and Foreign Trade Bank (BICE) and Banco Nación will also attend.

According to official sources: “it will be a comprehensive meeting to address the issue of the drought from every angle”. 

The truth is that Massa had already anticipated that he would start to implement a comprehensive plan to mitigate the effects of the drought as far as possible. There is concern about the economic situation of small and medium producers who will lose basically all of their soy and corn harvest, in a context in which they have already had to pay input and rent costs. In some departments of the core zone the situation is desperate and the losses for farmers producing corn in rented fields reach US$1,500 per planted hectare.

Although it was not officially disclosed, at this time there are speculations about the economic team implementing not only non-refundable contributions but also soft loans specifically aimed at small and medium-sized producers, both agricultural as well as livestock farmers and those working with regional economies.

Unfortunately, at the moment there is no expectation of any climatic improvement that would ease the drought, since the rains forecast for February are now not expected to arrive until March, and that constitutes a big problem for farm production and the inflow of foreign currency in 2023.

Currently, early projections of both the Rosario Stock Exchange and the Buenos Aires Grain Stock Exchange anticipate that the soybean and corn harvests will drop below 40 million tons, an unprecedented event amid what climatologists describe as the driest season in the last 60 years.

For grains complexes alone, exports are forecast to drop by US$7 billion-15 billion this year. Meanwhile, the drought has affected almost 50% of the national bovine herd, around 26 million heads. In the immediate term, this is causing greater availability of meat in the domestic market –and frozen prices– but the truth is that the scenario will be complex in the second semester, when live cattle are expected to rise in value by up to 100%.

In short, decisions are being made in these hours and in the midst of a complicated context of drought, the government is approaching all stakeholders, including the Liaison Board, to talk and work together in order to find mechanisms for assistance and promotion for the hardest-hit sectors.

Author: Yanina Otero / Originally published in / Translated by Agustin Mango

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