Clearly, the field has before it two pieces of news: a good one and a bad one for next year. The first is the recovery of the level of rainfall and the almost certain arrival of El Niño, which represents for the region equal or greater rainfall above the average, for the 2023/24 campaign. After three cycles with a Niña event, the rains allow us to encourage hope with the wheat that has already begun to be implanted and a favorable outlook for the coarse grains. Livestock, in turn, will also be able to recover pastures.
the bad one is the international context of prices which, unlike the past cycle, is presented as bearish. The rising production in Brazil and the United States, accompanied by a favorable climate for crops, in addition to other economic seasonings such as the strength of the dollar against other currencies, show a falling price horizon when compared to those of the last campaigns .
Climate and markets, in short, are the usual risk factors for the agricultural business, it is known. In Argentina, however, there is a third factor, different from that of much of the rest of the world: the political.
In an election year, the uncertainties are greater than the certainties. Whoever wins, the next government will have to face a harsh monetary restriction, a consequence of the economic mismanagement of the last four years. But if there is a sector of the economy that is in a position to make a concrete contribution to face this difficulty, it is the countryside. The question that arises is whether the political leadership and the economists that surround it will ever be able to understand that the decisions they make for the activity that generates 70% of the genuine currencies that enter the country have to take into account the biological production cycles.
In other words, a candidate who now talks about lifting quotas on wheat exports, for example, or proposes a reduction, lowering or elimination of export duties, is in a position to influence the sowing decisions that are made now. In the same way, those who finally compete in the PASO next August, if they could understand the cycle of soybeans or corn, would have to have clear definitions.
This week, in the Maizar Congress, there was an example of this. Among the front-line leaders such as former President Mauricio Macri, Senator Alfredo Cornejo and economists Diana Mondino and José Luis Espert, the head of the City Government, Horacio Rodríguez Larreta, also participated. The PRO candidate insisted that he will zero withholdings for some 200 products from the regional economies, but that the rest will have a reduction path on which he did not give details. For extensive crops, which contribute the most to foreign exchange, he knows little.
Perhaps caution is prevailing among the advisers to the head of the Buenos Aires government, taking into account the precedent of Macri who, before the 2015 elections, promised on the Cambiemos platform that withholdings on soybeans would drop 5% per year until the end of his term. As will be remembered, he was only able to serve his first year.
Even if the level of grain prices is lower than last season, by 2024 the field will be one of the key engines of the economy. Any aspirant to occupy the chair of Minister of Economy or president of the Central Bank knows that a large part of the currencies come from a single activity. A more forceful proposal regarding what he plans to do as of December 10 may have a response in the short term.
It is not about capturing the “farm vote” because this idea is debatable. There are those who believe that a definition on agricultural policy can translate into a greater electoral volume in the Pampas region and in the central strip of the country. Others, on the other hand, maintain that “rurality”, understood as the space that is not reduced only to the producers but to those who are directly or indirectly linked to the countryside, is not receptive to such definitions. In any case, the evidence shows that when there is a clear horizon and rules similar to those in force in the countries of the region, in terms of economic stability, the countryside responds with more investment. It will be a matter of taking into account that this scenario can also be understood, sometime, by the political leadership. Agriculture can also continue doing its homework so that, sometime, this can be achieved.
