Argentina is Saying Hello to the World Again
Nov 09, 2017
By Pedro Vigneau: Bolivar, Argentina
We’re saying hello to the world again.
That’s the simplest way to understand last month’s elections in Argentina, in which the party of reform-minded President Mauricio Macri made important legislative gains, picking up seats in both chambers of our Congress.
As a farmer in Argentina, I’m pleased by this political victory—but I’m even more encouraged by what it means for my country’s general direction.
For too long, we’ve faced inward rather than outward. Although Argentina grows a huge amount of food and depends on global trade for its prosperity, we have behaved as if none of this mattered. The previous government slapped huge export taxes on farm products and didn’t consider the consequences. We stepped away from the world market.
This wasn’t my decision, but rather the decision of former president Cristina Fernandez de Kirchner, the head of the Peronist Party. When she took office a decade ago, export taxes were already high—and she worked to raise them even more.
The American President Ronald Reagan once made a wise observation: “If you want less of something, tax it.”
Kirchner and her allies had targeted one of the most successful sectors of Argentina’s economy. Our farmers produce about ten times the amount of food we need to feed our population of nearly 45 million. On my farm of 3,500 acres, southwest of Buenos Aires, we grow soybeans, corn, sunflowers, sorghum, wheat, oats, and barley—and the vast majority of it turns into exports.
Argentina is a breadbasket for the world. The money we make from our overseas customers underwrites our domestic prosperity. Farmers account for something like 70 percent of our exports.
It makes no sense to cut this lifeline. And yet that’s exactly what we had started to do. The result was both sad and predictable: reduced production, a stagnant economy, and widespread unhappiness.
We have to take a longer view. As a fifth-generation farmer, I can’t help but think this way. I’m always focused on the next harvest, but I’m also planning for my children and grandchildren.
This is why I’m devoted to sustainable agriculture, from the no-till practices that prevent erosion to the advances in biotechnology that allow us to grow more food on less land. When we pass on our inheritance to our descendants, the soil must be even more fertile than it was for our ancestors.
Yet sustainability isn’t just about the environment. It’s also about economics—and the need to make sure that we can make a living as farmers who are also good stewards of the land.
Export taxes threaten this. They give us less of a good thing.
It might be said that we are victims of our own success. As Argentina’s farmers have become more productive and efficient, we have fewer people growing food—and now many of my countrymen have a poor understanding of where their food comes from, even if many of them are involved in other areas of the food value chain.
This includes politicians. When they see farming is a mere abstraction, they can make the mistake of thinking that export taxes won’t affect anyone but farmers.
But that’s wrong. We’re all connected. In an economy that depends on exports, closing the door to the world market is a bad idea.
The election of President Macri two years ago began to change this. He pledged to cut export taxes. He has done so and also has introduced a plan to continue these reductions through 2020.
Combined with other much-needed reforms on labor and pensions, these steps have started to push our economy forward. October’s mid-term elections served as a stamp of approval: The people support President Macri’s moves and want more.
We have much to do. Although Argentina continues to lower taxes, they’re still too high. Farmers also would benefit from improved infrastructure, so that we can move our food to ports more easily. Moreover, we need better access to financing. We must modernize our intellectual property laws, too.
Separately, we farmers must do a better job of communicating with the public, showing people what we do and how our prosperity is linked to theirs.
These challenges must be understood in the welcome context of our reengagement with the world. Since the elections, stock prices have gone up and the peso has strengthened.
That’s what happens when you say hello to the world: It says hello back.
Pedro Vigneau is a fifth-generation farmer, raising cattle and growing crops for fodder and grains, including GM soya, in Central Argentina. Passionate about the benefits of no-till farming and the use of technology to protect the environment, Pedro is a member of the Global Farmer Network where this column originally appears (www.globalfarmernetwork.org).
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