Travelling scholars field report
Posted by: Richard Gardner	Date: 20 July 2003

I am catching up in Santiago in Chile today before a flight to New Zealand tonight.

In local South American style, my flights where changed so I had 2 days here, instead of one, which had really annoyed me. That was until an English wine maker I met on a flight suggested that the skiing was pretty good in Chile. Yesterday morning I arrived in Santiago at 5.30am, after a five hour flight from Quito in Ecuador, and was on a bus to the ski slopes, all kitted out by 8.30am. (I think that I can thank John Stones for examples in pace setting)

South America has been fantastic, with time mainly in Argentina and a few days off to visit some Ecuadorian friends. My desire to travel to this part of the world was more about understanding agricultural potential here rather than following my study topic.

I read an article not long after arriving in Argentina about the comparison between it, and Australia and Canada. The suggestion was that they were all at the same point early on in the 20th century and now Argentina is not much better than a third world country. Argentina probably had more potential than the other countries particularly given its agricultural potential and other resources. The problem all boils down to the politics and some suggest the lack of a sound English style democracy. Corruption has been and to a lesser degree now is rife. The control over the economy and the ability to raise revenue is very poor. Most people don't bother to pay thier taxes and there doesnt seem to be any consequenses.

It was suggested that there is still 50% more agricultural production potential in Argentina. The problem with developing that potential comes back to the government. There is no process in place to allow lenders to recover thier security if a borrower defauts on a loan. Therefore the banks will only lend money at around 15 -20% interest. Also there are big risks involved in borrowing money because of changing monetary policy. Three years ago the devaluation of the peso from 1 : 1 with the US$, down to around 2.8 : 1 US$, left borrowers with loans in pesos with nearly one third the debt they originally had. Land is still traded in US dollars which maintains some stability to the market.

Some facets of agriculture made me envious of the Argentinain farmers and other not. Only 30 - 40% of land is farmed by its owners. Most of the land is rented out which provides great opportunities to people to expand without the capital input. Wages are low, around A$ 8000 per year for a farm hand, tractor driver. The low wages is also interesting as it allows the farmer to step back out of his business so much more and think more strategically. Most farmers live in the city or in a local town rather than on the farms. I was impressed by the people I met and thier ability to focus on the bigger picture. Obviously this factor of low labour costs also allows some farmers to do bugger all and live the high life in Buenos Aires. On the down side, there is a tax on exports of 20% which puts world subsidies into a different perspective.

I was fortunate that I happened to chance on a few better operators, and while I had not travelled to Argentina with the aim of following my study topic, came away with some terrific material. One very interesting organisation is the AACREA, Argentine Association of Regional Consortiums for Agricultural Experimentation.

The AACREA is the National organisation of 1300 members in 138 CREA groups. The groups are very similar to our discussion groups but are organised into regional areas and then the national association. The fantastic thing is that all the data from the 1300 members is collated in the AACREA. The information is then published in a monthly magazine and in the national newspaper. Each group has an agronomist / consultant who organises the meetings and visits all the farms on a monthly basis.

CREA members share a lot of information and build the members into a very tight knit group. They meet once a month for a whole day! In the last two years they organisation has encouraged all the members to do a Herrman Brain Dominance Instrument assessment.

This is a questionnaire which determines how you think. Are you logical, emotional, conservative, artistic etc. 95% of the members have now done the assessment. Now they have found that the communication within the groups has improved with a better understanding of how people work together. I did the assessment myself and it was interesting to learn about the way I approach communication with others and where I need to improve.

The cost of around A$ 10 000 per year and a whole day a month, the CREA groups really made me think about how we in Australia see this type of management tool. I think that the cost of labour makes our situation different but generally we are not putting anywhere enough emphasis on these sort of tools.

The major trend in agriculture in Argentina is toward cropping, particulaly maize and soya. I got the feeling here that the beef industry may not really become a huge threat world wide because of all of the land use change to crop. Another thing that helps is that even if they really become completely foot & mouth free, the local consumption of 55 kg of beef per head per year is a fair market in itself. From a cropping point of view there are probably few countries in the world with the quality of soils and climate as good as Argentina. Some of the places I saw had organic matter levels of 4 - 8% and were at least a metre deep. The also get the opposite season in an el nino with more rain. The general opinion is also that it is getting wetter in a lot of areas.

From what I undestand Brazil may be more of an issue. A Brazilian vet told me that without knocking down another tree they could still double their farming area.

My visit to Ecuador was a few days off to see some friends. The usual thing happens when you tell people about why you are travelling, and I ended up on a farm. The people I visited ran a rose plantation for flower export to the US. It was similiar to business's we had seen all around the world selling horticultural crops, and as usual I came away impressed with the management of the business.

My next stop is in New Zealand for a few weeks and then a week on the mainland of Australia to try and put things into perspective. As one of my friends said, to land back in planet Tasmania.