Agricultural Policy Monitoring and Evaluation 2023

4. Argentina

Support to agriculture

Argentina’s overall support to the agricultural sector has been negative since the beginning of the 2000s due to export taxes that depress domestic prices received by producers. However, some budgetary payments are provided to producers based on input use, mainly in the form of credit at preferential rates.

Fluctuations in support are driven by changes in export tax rates and macroeconomic conditions such as the steep depreciation of the Argentine peso since 2018 and high inflation. Support to producers (Producer Support Estimate, PSE) averaged -14.6% of gross farm receipts in 2020-22, compared to -11.8% two decades earlier, but has been as negative as -51.1% in 2008. Negative market price support has been the main component of producer support, such that 98.8% of policy transfers were considered most-distorting in 2020-22. The ratio of producer to border price (National Protection Coefficient, NPC) reached 0.86 in 2020-22, making producers’ prices on average 14% below world market prices.

Soybeans are the main export commodity and face the highest export tax rate. As a consequence, Single Commodity Transfers (SCT) are most negative for this product, representing 39.5% of commodity gross farm receipts. Price support and SCTs are only positive for pig meat and eggs. Mirroring the negative PSE, consumers enjoyed a positive Consumer Support Estimate (CSE) of 18.5% of expenditure at farm-gate prices in 2020-22.

Starting from a level well below that of most other emerging economies covered in this report, support to general services (General Service Support Estimate, GSSE) decreased relative to the value of agricultural production, falling from 0.6% in 2000-02 to 0.5% in 2020-22. Expenditure on the agricultural innovation system and extension services represents the biggest component but has been decreasing relative to the size of the total GSSE budget, falling from 57% in 2000-02 to 50% in 2020-22. Agricultural production and exports grew dynamically in the last two decades due to an innovative private sector, despite negative price support and a relatively lower increase of support by public services, particularly for knowledge, research and extension, and sanitary inspection, in terms of share of government spending.

In 2020-22, 61% of total budgetary support targets GSSE rather than individual producers. Total budgetary support to farmers and the sector overall was 0.1% of Gross Domestic Product (GDP) in 2020‑22, well below the absolute value of negative market price support, making the Total Support Estimate (TSE) negative throughout the period: -1.0% of GDP in 2000-02 and -1.6% in 2020-22.

Recent policy changes

During 2022, Argentina set standards for bovine meat marketing, launched the Plan GanAr to develop livestock, and created the Economic Compensation Programme for Small and Medium Sheep Wool Producers. An organic sector strategic plan was implemented, comprising a new law to promote organic production and the creation of a voluntary label for products in the conversion process. Programmes such as “En nuestras manos” (“In our hands”) continued to promote sustainable agri-food systems for family farming and to reduce gender gaps in rural areas.

SENASA, the main agency in charge of plant and animal health and food safety, issued a national sanitary alert due to African Swine Fever outbreaks and implemented measures to mitigate its spread. Efforts were made to improve infrastructure, with execution agreements signed with several provinces to improve rural roads, electrify remote areas, and develop agriculture within the framework of the Regional Plan for Irrigation Reservoirs.

The government engaged into actions to support the bioeconomy. It introduced the BIODESARROLLAR and CoopAR programmes to stimulate innovation and competitiveness in regional agro-industrial value chains. Commercial authorisation was granted for a vaccine against Bovine Leukosis and four genetically modified organisms for plants were approved. Argentina agreed with Brazil to link their respective regulatory bodies responsible for biosafety regulations of biotechnological products, with the aim of reducing delays in bilateral trade of biotechnological products.

Exchange rate controls in place since 2019 have led to a widening gap between official and market exchange rates, affecting the price received by farmers. In response, the government launched the Export Increase Programme, in which soybean producers are paid at a higher exchange rate than the official one. This intends to make exports more attractive, to promote soybean sales and strengthen international currency reserves. Export taxes were reduced for organic products.

Assessment and recommendations

• Argentina should strengthen its efforts to develop and disseminate climate information to enhance climate-change adaptation in the agricultural sector. The Inter-institutional Protocol for Information Management should be strengthened and expanded to include comprehensive climate information and research findings related to agriculture. Leveraging research projects such as those implemented by the National Institute for Agricultural Technology (INTA) can contribute to the adoption of mitigation practices and improve adaptation policies.

• Building on the Rural Change Programme and the Territorial Agroecological Nodes Project, further investment should be made to provide technical assistance, training, and capacity building for farmers to become more resilient and improve their sustainability performance. The government should encourage farmers to adopt climate-smart practices, crop diversification, and sustainable land-management techniques through targeted support programmes and financial incentives.

• More investment in irrigation infrastructure and improved water-management systems is needed to deal with persistent drought. The government should extend the Regional Plan for Irrigation Reservoirs to cover water-deficit regions. Promoting the adoption of drought-tolerant crops and sustainable farming practices can also enhance resilience in the face of changing climate patterns.

• Given agriculture’s high share (28%) of greenhouse gas (GHG) emissions, and Argentina’s commitment to reduce national emissions in 2030 and achieve net zero in 2050, the government would benefit from introducing mitigation targets for the agricultural sector and proposing measures to achieve those targets.

• To help small and medium-sized producers, the government should expand financial assistance programmes and provide easy access to credit with preferential interest rates. Investing in training programmes, knowledge-sharing platforms, and the development of regional agro-industrial value chains can boost the competitiveness and resilience of these producers.

• The government should provide technical assistance and training to improve livestock production, enhance value-added at origin, and modernise the beef marketing system. Emphasising environmental sustainability within the Argentine cattle system through better land-management practices can also contribute to long-term success.

• Unpredictable export restrictions and uncertainty with respect to exchange rates and inflation disincentivise long-term investment and reduce food security. A more balanced and transparent approach to export taxes should be adopted, accounting for the economic viability of producers and the competitiveness of the agricultural sector, as part of an economy-wide tax-system review considering alternative sources of fiscal revenue.

• Agricultural policy could be better anchored in a broad, long-term policy framework, moving towards more neutral, stable, predictable, and targeted policies. The execution of policy must be delivered in a timely manner, avoiding legislative and implementation delays, for farmers to plan their economic activities more efficiently.

• To deliver research, extension, and other public goods for agricultural innovation, Argentina should develop systematic monitoring of efforts and results in R&D and innovation and define and implement strategic priorities. Innovation policy should emphasise public goods such as those related to sustainability and improving value chains, or for regional economies.

Figure 4.1. Argentina: Development of support to agriculture

 

 

 

 

 

Source: OECD (2023), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en

Figure 4.2. Argentina: Commodity-specific transfers as a percentage of commodity gross farm receipts, 2020-22

Source: OECD (2023), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en

Table 4.1. Argentina: Estimates of support to agriculture

Million USD

	2000-02	2020-22	2020	2021	2022p
Total value of production (at farm gate)	16 296	57 559	45 922	55 065	71 689
of which: share of MPS commodities (%)	82.55	86.14	85.68	86.48	86.27
Total value of consumption (at farm gate)	7 417	39 932	33 283	37 870	48 643
Producer Support Estimate (PSE)	-971	-8 439	-4 989	-10 863	-9 463
Support based on commodity output	-1 005	-8 558	-5 076	-10 978	-9 621
Market Price Support1	-1 067	-8 642	-5 239	-11 002	-9 684
Positive Market Price Support	156	329	205	426	355
Negative Market Price Support	-1 223	-8 971	-5 444	-11 428	-10 040
Payments based on output	62	83	163	24	64
Payments based on input use	34	117	85	111	155
Based on variable input use	2	9	6	11	11
with input constraints	0	0	0	0	0
Based on fixed capital formation	23	85	59	79	116
with input constraints	0	0	0	0	0
Based on on-farm services	8	23	20	21	28
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	3	2	3	2
Based on Receipts / Income	0	0	0	0	0
Based on Area planted / Animal numbers	0	3	2	3	2
with input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0
Percentage PSE (%)	-11.79	-14.64	-10.81	-19.68	-13.16
Producer NPC (coeff.)	0.89	0.86	0.90	0.82	0.88
Producer NAC (coeff.)	0.89	0.87	0.90	0.84	0.88
General Services Support Estimate (GSSE)	116	300	264	266	371
Agricultural knowledge and innovation system	66	150	150	120	179
Inspection and control	33	115	80	113	151
Development and maintenance of infrastructure	17	31	31	31	31
Marketing and promotion	0	5	3	1	10
Cost of public stockholding	0	0	0	0	0
Miscellaneous	0	0	0	0	0
Percentage GSSE (% of TSE)	..	..	..	..	..
Consumer Support Estimate (CSE)	455	7 200	4 191	8 334	9 076
Transfers to producers from consumers	482	7 573	4 318	9 125	9 276
Other transfers from consumers	-6	160	110	14	356
Transfers to consumers from taxpayers	0	0	0	0	0
Excess feed cost	-21	-533	-238	-805	-556
Percentage CSE (%)	13.44	18.48	12.59	22.01	18.66
Consumer NPC (coeff.)	0.87	0.83	0.88	0.81	0.83
Consumer NAC (coeff.)	0.88	0.84	0.89	0.82	0.84
Total Support Estimate (TSE)	-855	-8 139	-4 726	-10 598	-9 093
Transfers from consumers	-476	-7 733	-4 429	-9 139	-9 632
Transfers from taxpayers	-373	-565	-407	-1 473	184
Budget revenues	-6	160	110	14	356
Percentage TSE (% of GDP)	-1.02	-1.62	-1.21	-2.16	-1.45
Total Budgetary Support Estimate (TBSE)	212	503	513	404	592
Percentage TBSE (% of GDP)	0.10	0.10	0.13	0.08	0.09
GDP deflator (2000-02=100)	100	10 684	6 208	9 570	16 273
Exchange rate (national currency per USD)	1.70	98.79	70.64	95.08	130.66

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Argentina are: wheat, maize, soybean, sunflower, fruit and vegetables, milk, beef and veal, pig meat, poultry and eggs.

Source: OECD (2023), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database). http://dx.doi.org/10.1787/agr-pcse-data-en

Description of policy developments

Overview of policy trends

Argentina has a history of macroeconomic instability and policy volatility, switching from open markets to import substitution in a way that has led to overall poor long-term economic performance (OECD, 2019[1]). The main exception has been the agricultural sector which, despite policy impediments, has innovated and grown. Driven by higher international agricultural prices, Argentinian agriculture – in particular, in the extended Pampas region – has experienced a major structural transformation. This has been reflected in changing land use, the emergence of soybean as a major commodity, and diversified and growing export markets, especially toward Asia. However, outside of the Pampas, other crops like tobacco, cotton and fruits and vegetables have been less successful.

Argentina liberalised trade in the late 1970s and explored ways to increase trade with its neighbours and other economies from the second half of the 1980s. In the 1990s, the Argentine economy became more integrated in international trade, including the liberalisation of the agri-food sector, through the creation of MERCOSUR in 1991 and the 1994 WTO Agreement. However, after the financial crisis in 2001, Argentina reverted to increasing tariffs, establishing price controls for food products, and re-introducing export taxes on agricultural products such as soybeans to raise revenue and reduce basic food prices. Further export restrictions in the form of quotas for wheat, maize, milk, and beef were imposed in 2008. Between 2007 and 2011, a consumer price subsidy was implemented. The National Office of Agricultural Commercial Control (ONCCA) agency provided payments to processors purchasing wheat, maize, soybeans, and sunflower products from the local market.

In December 2015, the government began to gradually re-open markets again: it reduced export taxes on soybeans and soybean oil, eliminated export taxes on all other agricultural products, removed all export quotas, and free-floated the exchange rate of the Argentine peso to other currencies. But following the 2018-19 depreciation of the local currency and the subsequent economic recession, export taxes were re-established not only for agri-food products but for all goods by the government that had reduced or eliminated them. By early 2020, agricultural-specific export taxes were re-instated for most products in early 2020. Simultaneously, the exchange-rate controls introduced in the beginning of 2020 resulted in a widening gap between the official exchange rate and other market exchange rates.

Table 4.2. Argentina: Agricultural policy trends

Period	Framework	Changes in agricultural policies
Prior to 1990	Alternate free trade and import substitution policies	Price interventions on main agricultural products, mandatory public stockholding, export taxes on agricultural trade, tariffs on imports of agricultural inputs such as fertiliser, low levels of investment in private agricultural R&D and infrastructure in general Several attempts to liberalise trade Creation of agricultural R&D and extension services institute INTA (1956); private institutions such as AACREA (1960) and AAPRESID (1989) created to provide services to farmers
1991-2001	Shifts to open the economy	Dismantling stockholding and price-setting public institutions, reduction of import and export tariffs, free trade agreements (Mercosur and WTO) Price stabilisation, reduction of barriers to trade, privatisation and deregulation of markets Dissolution of National Commercial Boards (1991) Creation of animal and plant health and food safety SENASA (1996) Creation of the seed regulatory institution INASE (1991)
2002-2015	Return to a closed economy	Implementation of export taxes, import restrictions, value chains subject to regulations as export quotas and price controls at the retail level The National Office of Agricultural Commercial Control (ONCCA) dismantled (2011)
2016-2017	Gradual shifts to open the economy	Elimination of export taxes for all agricultural commodities, except reduced taxes on soybean exports Elimination and reforms to the Register of Export Operations ROEs (2015) Federal Agricultural Council (CFA) reformed (2017)
2018-present	Reintroduction of export taxes	Export taxes established for all exports including agriculture in response to the economic crisis of 2018 Reintroduction of specific taxes on agricultural products and exchange rate controls since 2019

Prior to the economic crisis of 2001, producer support fluctuated around zero. With the reintroduction of export taxes and other trade restrictions after the 2001-02 financial crisis, the PSE turned negative due to substantial negative market price support and absence of any significant budgetary support to farmers. Negative producer support peaked with price spikes in world markets in 2008, reaching ‑51.6% of gross farm receipts. Lower export taxes in 2015 reduced negative support. Budgetary support to farmers remained limited and mainly in the form of subsidies for tobacco. Around 60% of total expenditures on agriculture in the last ten years financed general services to the sector. From 2007 to 2010, Argentina provided subsidies to food processors (primary consumers), to compensate for high prices of agricultural products.

Figure 4.3. Argentina: Level and PSE composition by support categories, 1997 to 2022

Notes: A/An/R/I:Area planted/Animal numbers/Receipts/Income.

Payments not requiring production include Payments based on non-current A/An/R/I (production not required) and Payment based on non-commodity criteria. Other payments include Payments based on non-current A/An/R/I (production required) and Miscellaneous payments.

Source: OECD (2023), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.

Main policy instruments

Unlike most countries covered by this report, producers of main agricultural products are taxed through negative price support. Export taxes are by far the most important market intervention and the major source of policy-driven transfers from producers to the government. The Ministry of Finance designs and implements these export taxes and adjusts their rates by decree. Export taxes for soybeans, soybean products (meal and oil), maize, wheat, other cereals, sunflower grain and oil, maize and wheat flour, several milk products, and beef raised 8.3% of total tax revenues for the national budget in 2022. Additionally, the Ministry of Agriculture, Livestock and Fisheries implements the so-called “equilibrium volumes of exports” (VEE) to meet the demand of the Argentine market for maize, wheat, and beef. All these measures continue to substantially depress domestic prices below international reference prices.

A relatively small amount of input subsidies are provided, mostly in the form of implicit interest rate subsidies through preferential credits that finance investment and working capital in the production of a range of commodities. For example, the fund FONDAGRO, which was established in 2017, finances investment in the sector at preferential interest rates for specific groups with a limited scope. The Ministry of Productive Development provides credit financing for capital investments by micro, small, and medium-sized enterprises in the poultry and pig sectors.

Very small direct payments are provided occasionally as disaster assistance in response to extreme weather events, mainly drought. There are no national direct payments for agri-environmental services, and few at provincial level.

The Special Tobacco Fund (FET) was created in 1972 to provide additional revenue and support to tobacco producers in certain northern provinces. The fund is financed by a 7% tax on tobacco retail prices and managed by the Ministry of Agriculture, Livestock, and Fisheries. The federal government transfers 80% of collected funds to tobacco-producing provinces based on their share of production. After signing the WTO agreement in 1994, Argentina committed to reducing this support, and FET payments to tobacco producers were reduced to USD 75 million. The remaining funds are used for technical assistance, investing in local infrastructure, and providing social and health assistance.

Public expenditures in agriculture are mainly for general services to the sector such as the agricultural knowledge and innovation system and inspection control services. INTA is the federal agency responsible for research and promoting technological innovation in agriculture, livestock, and agri-food. The institute conducts scientific and technological research, provides technical assistance and training to farmers and other stakeholders in the agricultural sector, and develops and disseminates knowledge and technologies related to agricultural production, agro-industrial processes, and rural development. INTA also collaborates with national and international organisations, universities, and private companies to promote innovation and competitiveness in the agricultural sector.

SENASA is responsible for ensuring the safety and quality of agricultural and livestock products. It develops and enforces regulations and standards for the production, processing, and transport of agricultural products, it provides certification, inspection, and laboratory services to ensure compliance with these standards. SENASA also works to prevent and control the spread of animal and plant diseases, and it monitors and controls the use of pesticides and other agricultural chemicals to protect human health and the environment.

The Agricultural Provincial Services Programme (PROSAP) invests mainly in large-scale agricultural infrastructure. In addition, it provides support services for competitiveness with projects aimed at improving agri-food chains.

Since 2016, Argentina is party to the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) for the conservation and sustainable use of all plant genetic resources for food and agriculture. The National Advisory Committee on Genetic Resources for Food and Agriculture (CONARGEN) co-ordinates public agencies on genetic resources and biodiversity for food and agriculture.

Agri-environmental regulations and policies in Argentina are mostly legislated and implemented at the provincial level. For example, the province of Córdoba has a Law of Good Agricultural Practices that sets standards for sustainable agricultural production and compliance with the programme gives farmers access to lump-sum payments. Santa Fe also started a Good Agricultural Practices Programme in 2021, and Entre Ríos enacted a Law on Soil Conservation in 2018, which requires mandatory soil conservation for areas with soil degradation. In Buenos Aires, the Buenas Prácticas Agrícolas - Suelos Bonaerenses Programme of 2020 provides training and supports extensive producers of crops to carry out crop rotation, practices reducing water and wind erosion, and plans to reduce pesticide use.

Mandatory blending of biofuels in diesel and gasoline has been in effect since 2010. The blending rates have been frequently adjusted within a range between 5 and 12.5% and has been fixed at 7.5% since October 2022. Also in October 2022, the Secretary of Energy established quality specifications for biofuels and their blends and created the Registry of Biofuel Operators and Mixers, which registers the main actors in the biofuel production and marketing chain.

Since January 2020, the social programme “Argentina Against Hunger” provides financial support for children, pregnant women and disabled people. Support is provided through an electronic food card (ALIMENTAR Card) that can be used in any grocery store. The food card is given to parents of children under the age of six who receive the Universal Allowance per Child (AUH), pregnant women who receive the Universal Pregnancy Allowance (AUE), and people with disabilities who receive the AUH. In 2022, the programme reached over 2.5 million adult beneficiaries and 4.4 million children.1 Beneficiaries receive different amounts depending on the number of children in the family.

The agricultural sector contributes 28% of GHG emissions in Argentina (Ministerio de Ambiente y Desarrollo Sostenible, 2021[2]). Argentina’s second NDC in the framework of the 2015 Paris Agreement on Climate Change was submitted in December 2020 and updated in October 2021. Argentina is committed to an absolute, economy-wide and unconditional net emission limit of 349 MtCO₂eq by 2030 – equivalent to a decrease of 19% compared to the peak reached in 2007. Some of the tools that Argentina employs to reach this goal are expansion of renewable energies (at least 30% of the total energy matrix will have to be from renewable sources by 2030), lower subsidies for fossil fuels, expanded protected areas, and improved efficiency in agriculture, industry, transport and construction among others. In addition to its active commitment and participation in the primary multilateral competent fora on climate change, i.e. the UNFCCC, Argentina participates in other initiatives, such as the Global Bioenergy Partnership and the Global Research Alliance on Agricultural Greenhouse Gases (GRA) and the Global Methane Pledge initiative, among others. The National Institute of Agricultural Technology (INTA) plays an important role in research and innovation to reduce GHG emissions from agriculture. It has a portfolio of research projects related to climate change mitigation and adaptation.2

Climate change adaptation policies in agriculture

The National Plan for Adaptation and Mitigation to Climate Change by 2030 is designed to align with the objectives of the United Nations Framework Convention on Climate Change (UNFCCC) under the Paris Agreement. The plan includes mitigation and adaptation measures for the sector based on risk management. An inventory of GHGs from agriculture, livestock, forestry, and other land uses was completed to monitor and evaluate the sector’s emissions.

The Smart Climate and Inclusive Agri-food Systems project began in 2022 with a budget of USD 400 million financed by the World Bank (Ministerio de Agricultura, Ganadería y Pesca, 2022[3]). The general objectives of the project relate to adaptation and resilience. It invests in coverage and quality of rural public infrastructure; promotes the sustainability of small and medium-sized agri-food producers and their organisations through climate-smart practices; and supports the reorientation of INTA towards climate issues. The project is implemented by the Ministry of Agriculture, Livestock and Fisheries, through the General Directorate of Sectoral and Special Programmes and Projects (DIPROSE).

Various adaptation policies have been implemented, targeting short-, medium-, and long-term goals. Policies for short-term action include:

• The Inter-institutional Protocol for Information Management, which addresses the threat of meteorological and agricultural droughts in Argentina by articulating access to data and information, and promotes research and development of new technologies, for the evaluation of fire-danger conditions.

• The Integral Risk Management Programme (GIRSAR) Component 3 focuses on risk transfer and the improvement of agricultural emergencies. It includes an insurance programme for family horticultural and floricultural producers under greenhouse in the province of Buenos Aires, and an incentive programme to promote drought insurance.

• The National System for the Prevention and Mitigation of Agricultural Emergencies and/or Disasters extends the deadline for tax obligations to pay sworn declarations or advances related to taxes on income, personal assets and presumed minimum profit, and provides funds for education and cooperative promotion until the end of the productive cycle following a state-of-emergency or disaster.

• The 2020 Critical and Direct Assistance Programme for Peasant and Indigenous Family Farming (PACyD) grants non-refundable contributions in a direct and timely manner for peasant and indigenous family farmers. Potential beneficiaries are those affected by situations of productive risk caused by extreme climatic or social events.

Measures to support incremental change over the medium-term aim to modify production practices, including changes in planting dates, crop-mix adjustments, and technology adoption:

• The Rural Change Programme established in 1994 promotes agroecological livestock practices through technical and organisational advice, training, and experience sharing among producers.

• The Territorial Agroecological Nodes Project launched in 2022 promotes the development of agroecological livestock practices in partnership with institutions such as INTA and universities by creating exchange nodes for discussion.

• Other initiatives focus on building the capacity of beneficiaries through technical assistance, training, and investments in innovation and adaptation. For example, the Programme for the Promotion of Resilient and Sustainable Agri-Food Systems for Family Farming, the Argentine Agricultural Bio-inputs Programme (PROBIAAR), the Comprehensive Plan for Women in Peasant and Indigenous Family Farming, Sustainable AgroSMEs, the Smart Climate and Inclusive Agri-food Systems, the Programme for the Development of the Goat Chain (PRODECCA), and the Economic Insertion Programme for Family Farmers in Northern Argentina (PROCANOR).

Efforts to support long-term transformational change in agriculture include moving production to new regions, developing new value chains, and investing in large infrastructure projects. New governance structures, collaborative planning, and multi- and trans-disciplinary research are also important. Examples:

• Smart Climate and Inclusive Agri-food Systems

• direct public investment projects in rural roads of the Provincial Agricultural Services Programme (PROSAP) IV

• Plan for Access to Water for Family, Peasant and Indigenous Agriculture AFCI-DIPROSE-INTA (2020‑2023)

• Project for Socio-Economic Inclusion in Rural Areas (PISEAR) to promote socioeconomic inclusion of rural families living in poverty

• GIRSAR Programme

• land registration and land regularisation programmes

The National Institute of Viticulture (INV) promotes sustainable practices in the sector since 2009, including through the Protocol of Self-Assessment of Wine Sustainability of Wineries of Argentina, the Methodological Guide for the Estimation of the Carbon Footprint in Wine, and the Argentine Wine Sustainability Guide. The INV works with academics, research institutions, and the private sector to promote a National Training Programme on wine sustainability, which has reached a significant number of participants from all over the country.

The INTA’s framework of the Medium-Term Plan (PMP) 2021-25 includes two guidelines related to climate-change adaptation:

• “Adaptation to climate variability and climate change mitigation” includes actions to contribute to the strengthening of climate governance. These are designed to increase adaptation capacity, collectively manage risks and boost the resilience of production systems and territories. It also develops mitigation strategies that reduce GHG emissions.

• “Sustainable management of natural resources and the territory linked to the care of the environment” provides proactive and integrated institutional actions for the sustainable management of natural resources and the territory.3

Domestic policy developments in 2022-23

Argentina has been facing extreme drought conditions since 2019, with only 44% of the average precipitation received in the last four months of 2022, the lowest value in 35 years. Thus, Argentina's domestic policy in 2022-23 was marked by extreme drought conditions, which resulted in poor agricultural yields and production. Simultaneously, the country showed macroeconomic instability with high inflation, exchange rate volatility, devaluation, and difficulties to keep the level of necessary foreign currency.

Production and marketing practices

In April 2021, the Ministry of Agriculture, the Ministry of Productive Development and the Ministry of Labour determined that bovine meat for retail may only be marketed in units resulting from the division of half carcasses into pieces not exceeding 32 kilos. The objective is to increase quality and health standards and market transparency. A transition period of between three months and one year was agreed for meat packing plants to implement the new marketing standard. The implementation of the measure was postponed several times and in 2023 is still pending. Currently, the only measure that was maintained was the ban of any transfer by workers of a product weighting more than 32 kilos, which needs to be done with the assistance of mechanical means.

The Plan GanAr was launched in 2022 with the aim of contributing to the development of Argentine livestock through the intensification of primary production, the increase of value added at origin, the modernisation of the beef marketing system, and the strengthening of livestock policies. The plan includes technical assistance, training, the improvement of productive financing conditions, and the development of a strategy to demonstrate the environmental sustainability of the Argentine cattle system.

In 2023, the Economic Compensation Programme for Small and Medium Sheep Wool Producers in the Patagonian Region (LANAR) was created. It has a total investment of ARS 1.5 billion (USD 11.5 million)4 from the “Export Increase Fund” to finance programmes that stimulate the production and development of small and medium producers and regional economies.

Following the 2021 strategic plan for the organic sector by 2030, several actions took place in 2022. These include a new law promoting organic production, the creation of a voluntary label for products in the conversion process, events and contests to promote organic products, and a platform providing information about certified organic operators.

Animal and plant health and safety

In November 2021, SENASA, the main agency in charge of plant and animal health and food safety, issued a national sanitary alert due to African Swine Fever (ASF) outbreaks in domestic pigs in the Dominican Republic and Haiti and its potential spread throughout the American continent. This alert remains in force, and SENASA has implemented new prevention measures and strengthened existing ones to reduce the risk of entry, exposure, and dissemination of the ASF virus in domestic pigs. In 2022, SENASA updated the documentation and infrastructure requirements that must be met by transporters of live animals and established the responsibilities and obligations of the owner and driver of the transport related to animal welfare standards.5 Also, in 2022, SENASA created the “Strategic Table of Cannabis and Industrial Hemp” to advance in the development of this sector.

Irrigation

In 2022, several execution agreements were signed with several provinces, including Chaco, Corrientes, Neuquén and Misiones to improve rural roads, electrify remote areas, and develop agriculture. These agreements were signed within the framework of the Regional Plan for Irrigation Reservoirs that started in 2021. The plan includes a diagnosis of the situation of irrigation in San Juan and Mendoza and proposals for improvement in irrigation efficiency using water reservoirs for pressurised irrigation, promoting the construction and use of reservoirs for small and medium-sized producers. Other water deficit regions such as Patagonia are to be included in the next stage of the plan. The project is implemented by the Ministry of Agriculture, the Ministry of Economy, the Ministry of Productive Development and the Provincial Governments.

Bioeconomy and Biotechnology

The Ministry of Economy’s Secretariat of Agriculture, Livestock and Fisheries launched two programmes in 2022: “BIODESARROLLAR” and “CoopAR”. BIODESARROLLAR aims to promote the development, innovation, adoption, and production of bioproducts by micro, small, and medium-sized enterprises, co-operatives, and public research entities. CoopAR aims to improve the competitiveness of regional agro-industrial value chains, promote differentiation, technological modernisation, and transformation of agro-industrial co-operatives.

The Advisory Commission of the Bioeconomy Promotion Programme approved the Action Plan for 2022‑2026, and the Argentine Bioproduct Programme was relaunched with a modified definition of bioproducts to promote innovative companies. In 2022, twelve Argentine Bioproduct Seals were awarded, and the technical and administrative criteria for the incorporation of bio-inputs for agricultural use have been unified.

In 2022 a commercial authorisation was granted for a vaccine to combat Bovine Leukosis that was developed by the National Institute of Agricultural Technology (INTA).

Four genetically modified plants were approved in 2022 in Argentina: two soybeans resistant to pests and herbicides, one herbicide-tolerant maize, and one drought and herbicides tolerant wheat.6 Soybeans and wheat with drought tolerance characteristics offering solutions for water stress in some regions, developed by the Institute of Agrobiotechnology of Rosario (INDEAR S.A), have been authorised in the main export destinations of Argentina (the People’s Republic of China and Brazil). These are the first genetically modified crops entirely developed by Argentine entities to obtain commercial authorisation in the export market.

Biofuels

The blending rates of biofuels have been fixed at 7.5% since October 2022. The Secretariat of Energy set the acquisition prices of biodiesel in the domestic market for its mixture with diesel, for the months of November 2022 to the end of March 2023.

Risk Management

In 2022, SENASA adopted exceptional measures for territories affected by droughts or fires. In 2023, the Ministry of Agriculture, Livestock and Fisheries will provide financing to assist the 11 provinces that suffered from frost damage. The Agricultural Emergency Fund will be executed, providing a total of ARS 1.5 billion (USD 11.5 million) to support affected producers in La Pampa, Río Negro, Neuquén, Mendoza, San Juan, La Rioja, Catamarca, Tucumán, Salta, Jujuy and Santa Cruz. In addition, FONDAGRO received ARS 1 billion (USD 7 million) to offer a credit line at a 0% interest rate to small producers in these provinces, with a maximum amount of ARS 900 000 (USD 6 888) per producer and a term of 30 months, including an 18-month grace period.

Rural development, family farms and indigenous agriculture

The project “En nuestras manos” that aims to reduce gender gaps in rural areas and assist agricultural producers in the context of the COVID-19 crisis. In 2022, the project assisted 2 229 families with an expenditure of EUR 4 million.

The Programme for the Promotion of Resilient and Sustainable Agri-food Systems for Family Farming (PROSAF) supports sustainable, inclusive production and marketing systems for peasants and family farmers. The programme, which was launched in June 2022, is financed by the International Fund for Agricultural Development (IFAD) and the Development Bank FONPLATA. The executing agency is the Ministry of Agriculture, Livestock and Fisheries, through DIPROSE and the Secretariat of Family, Peasant and Indigenous Agriculture. Between September and December 2022, training activities with the provincial technical teams were organised. The programme is expected to advance in 2023 with the realisation of a call for integral projects with INTA.

Trade policy developments in 2022-23

Export taxes were “temporarily” increased for some products in March 2022, including in particular for soybean products (meal and oil) from 31% to 33% (until December 2022), and for biodiesel from 29% to 30%. At the same time, a special fund was created with the objective of stabilising the price of wheat paid by Argentine mills. The fund is to be financed by the additional resources resulting from the temporary modification of export duties. The government has the possibility to adjust export tax rates by decree using a special authorisation from Congress based on “economic emergency” considerations since 2018. Thus, in 2023, export taxes are of 33% for soybean, 31% for soybean products (meal and oil), 12% for maize, wheat and other cereals, and 7% for sunflower grain and sunflower oil, 5% for maize flour, 7% for wheat flour, 4.5% for milk products, 9% for milk powder, and 9% for beef. Export taxes on other products from outside the Pampas region, such as wine, pears, apples, grapes, and cotton are 5%, and they were eliminated for a group of products, including ovine and caprine meat. The tariff scheme for dirty, washed and carded wool was set between 3% and 5%. For hair of different species, it was established between 3% (dirty) and 0% (washed).

In contrast, export duties on organic products were reduced. As from 15 January 2022, export duties for certified agro-ecological, biological and organic products were eliminated, and were reduced by five percentage points for wheat, soybeans and maize certified as organic.

Exchange-rate controls in place since 2019 have resulted in a widening gap between the legal (so called official) exchange rate and other market exchange rates. Agricultural exports are settled at the official exchange rate, which is lower than the rest and implies an additional reduction in the price received by farmers in ARS. Within the framework of the current programme with the International Monetary Fund (IMF) regarding exchange rate policy, to strengthen international reserves the government launched the “Export Increase Programme” in September and December 2022, aimed at promoting soybean sales and strengthening international currency reserves. Exporters of soybeans, flour, oil, and biodiesel made with soybean oil, have agreed to bring foreign currency into the country at a higher exchange rate than the official rate, which implies that they receive a higher price in ARS. The programme allowed the Central Bank of the Republic of Argentina (BCRA) to acquire USD 7 292 million because of a greater export sale, which in the months of the programme reached USD 12 416 million.

Since January 2021, maize and wheat exporters are required to comply with administrative export permits that are granted by the Ministry of Agriculture depending on the quantity available and the price in the domestic market. In December 2021, the Ministry of Agriculture, Livestock, and Fisheries established a framework regulating exports based on a “equilibrium volumes of exports” (VEE) and limiting export permits. The ministry publishes the VEE for maize and wheat based on the government’s projection of production, domestic consumption and stocks. Exporters can request export declarations (DJVE) for up to 90% of the VEE. Once this limit is reached, additional export permits will only be granted within 30 days of the expected exporting date. Between December 2022 and February 2023, there was an exceptional automatic extension of 360 calendar days for requiring the DJVE to export wheat and of 180 calendar days for foreign sales DJVE with expiration of the declared shipping period, plus the automatic extension, for maize.

In October 2022, Argentina and Brazil signed an agreement to establish a link between their regulatory bodies responsible for biosafety regulations of modern biotechnological products for agriculture, with the aim of reducing delays in biotechnological product trade between the two countries. The Memorandum of Understanding seeks to promote the development, authorisation, and commercialisation of national biotechnological products with the support of public policies of both nations, affecting industries such as flour, oil, pellet, and biofuels.

The MERCOSUR-EU free trade agreement involving EU Member States and the members of Mercosur (Argentina, Brazil, Paraguay and Uruguay) continues with its legal revision and public debate for its approval by the parliaments of the European Union, its Member States, and Mercosur countries.

Contextual information

Argentina is an upper middle-income country with a dynamic agricultural sector that has been making a growing contribution to the GDP, from 4.7% of the GDP in 2000 to 7.1% in 2021. In contrast, agriculture’s share of employment decreased from 12.5% in 2000 to 7.7% in 2021. The country is one of the world’s largest agricultural exporters, and agro-food exports have been growing significantly in the last decades, representing 41.5% of total exports in 2000, and 48.5% in 2021. In contrast, agro-food imports represent only 7.7% of total imports.

Argentina has abundant agricultural land representing almost 4% of the total agricultural area of all countries covered in this report, with a large share of this area composed of pastureland. The share of livestock in the total value of production was 35% in 2021.

Table 4.3. Argentina: Contextual indicators

	Argentina		International comparison
	2000*	2021*	2000*	2021*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	428	1 083	1.1%	0.9%
Population (million)	37	45	0.9%	0.9%
Land area (thousand km2)	2 737	2 737	3.4%	3.3%
Agricultural area (AA) (thousand ha)	128 510	108 382	4.3%	3.7%
			All countries1
Population density (inhabitants/km2)	13	16	52	64
GDP per capita (USD in PPPs)	11 543	23 650	9,350	23,401
Trade as % of GDP	9.1	14.4	12.3	15.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	4.7	7.1	2.9	3.9
Agriculture share in employment (%)	12.5	7.7	-	-
Agro-food exports (% of total exports)	41.5	48.5	6.2	7.9
Agro-food imports (% of total imports)	5.4	7.7	5.5	7.2
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	57	65	-	-
Livestock in total agricultural production (%)	43	35	-	-
Share of arable land in AA (%)	22	30	32	34

Notes: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; UN Comtrade; World Bank, WDI and national data.

The Argentine economy began to stall when the peso came under pressure in April 2018. The value of the peso vis-à-vis the USD was reduced by 40% in 2018, and by 70% in the period 2018-2021, and the economy plunged into recession and inducing annual inflation rates above 40%. The year 2022 ended with an annual inflation rate of 94.8%. Due to exchange rate controls, there exist exchange market rates that have been increasingly diverging from the official rate. Adversely affected by COVID-19, GDP declined by 9.9% in 2020, increased by 10.4% in 2021 and increased by 4.4% in 2022.

Figure 4.4. Argentina: Main economic indicators, 2000 to 2022

Sources: OECD statistical databases; World Bank, WDI; and ILO estimates and projections.

Argentina runs a significant agro-food trade surplus having exceeded USD 30 billion for most of the past decade. Most of agro-food exports (80%) are primary or processed products used as inputs in downstream industries abroad, whereas the much smaller bundle of agro-food imports is mostly composed of primary products for use by industry (61%).

Figure 4.5. Argentina: Agro-food trade

 

Notes: Numbers may not add up to 100 due to rounding.

Source: UN Comtrade Database.

Argentine agricultural production has grown at an annual rate of 2.4% between 2011 and 2020, above the world average of 1.9%. Within this total growth, 2.1% was due to an increased use of intermediate inputs, while only a small portion of production growth (0.5%) was due to Total Factor Productivity (TFP) growth, that is, innovations and technical improvements in the way resources are used in production. With this, the TFP growth was well below the world average.

Agricultural nutrient balances in Argentina, and in particular its average nitrogen balance, are comparatively low, albeit increasing. The shares of agriculture in energy use and in greenhouse gas (GHG) emissions are, at 7.3% and 30.6% respectively in 2021, well above the OECD average, with the high emissions reflecting the large number of ruminants. Notably the emissions share is well above the sector’s contribution to the economy. With more than 74% of total water abstractions, agriculture also is a major water user.

Figure 4.6. Argentina: Composition of agricultural output growth, 2011-20

Note: Primary factors comprise labour, land and capital (livestock and machinery). Intermediate input comprises materials (feed and fertiliser).

Source: USDA Economic Research Service Agricultural Productivity database.

Table 4.4. Argentina: Productivity and environmental indicators

	Argentina		International comparison
	1993-2002	2011-2020	1993-2002	2011-2020
			World
TFP annual growth rate (%)	1.7%	0.5%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2021*	2000*	2021*
Nitrogen balance, kg/ha	-1.4	5.2	32.2	30.4
Phosphorus balance, kg/ha	1.7	2.8	3.3	3.0
Agriculture share of total energy use (%)	5.8	7.3	1.7	2.0
Agriculture share of GHG emissions (%)	40.5	30.6	8.6	10.5
Share of irrigated land in AA (%)	..	2.2	-	-
Share of agriculture in water abstractions (%)	70.9	74.1	46.6	49.7
Water stress indicator	..	..	8.3	7.4

Notes: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

References

[3] Ministerio de Agricultura, Ganadería y Pesca (2022), Climate Intelligent and Inclusive Agri-food Systems Project. Ministerio de Agricultura, Ganadería y Pesca, República Argentina, https://www.argentina.gob.ar/sites/default/files/agro_xxi_-_mgas_-_anexo_3_pppi.pdf (accessed on  May 2023).

[2] Ministerio de Ambiente y Desarrollo Sostenible (2021), Inventario Nacional de Gases de Efecto Invernadero, https://inventariogei.ambiente.gob.ar/files/Booklet_INGEI-2022_entero.pdf (accessed on  March 2023).

[1] OECD (2019), Agricultural Policies in Argentina, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264311695-en.

Notes

← 1.  https://www.anses.gob.ar/sites/default/files/2022-08/Informe%20de%20Estad%C3%ADsticas%20de%20la%20Seguridad%20Social%202022.pdf

← 2.  https://inta.gob.ar/paginas/proyectos.

← 3.  https://inta.gob.ar/documentos/plan-de-mediano-plazo-2021-2025

← 4.  In this chapter, the official average exchange rate of 2022 is used for transforming ARS to USD at a rate of ARS 130.66 for USD 1.

← 5.  http://servicios.infoleg.gob.ar/infolegInternet/anexos/370000-374999/370218/norma.htm

← 6.  https://www.argentina.gob.ar/agricultura/alimentos-y-bioeconomia/ogm-vegetal-eventos-con-autorizacion-comercial