(Photo: a peas crop in Pergamino zone, the top lands for farming in Argentina)
Buenos Aires, March 12th. Agronomist Marcelo Marelli is one of the directors of Marbell Agro, a local company focused on pulses and popcorn trading and production. They contract peas production with farmers but also runs its own production in leased farms. “We hope not to drop from 1,000 hectares planted this year”, Marelli told to www.eFarmNewsAr.com. Some years ago they doubled this area, but several external and local circumstances discourage farmers to plant peas.
According to the Census and Statistics National Institute (INDEC) last year Argentina exported 60,912 metric tons of peas (both yellow and green) after have reached 94,279 MT in 2016 and 85,798 MT in 2017. But Marelli thinks that this year, exports will be around 40,000 metric tons.
“One of the external factors is that India crosses an electoral year and the Government is supporting their farmers boosting their pulse production through better prices. In fact, the Government rose import duties for yellow peas to 50%”, Marelli explains. “At the same time, Canada is rising its also peas production, and even though Canadians are processing its production in high value-added foods, the largest production pushes the prices down”.
But local factors have an equal or worse impact in the Argentine farmer’s decision to plant pulses. In August 2018, President Macri’s Administration decided re-impose taxes to all export products. This levy rounds 10% of the FOB value. “If we take CIF price, after discounting insurance and freight costs, we have a FOB price and we must apply the tax over this price. But fobbing costs in Argentina are too much expensive, especially when you ship your product in bags inside containers. This fobbing cost rounds 40 dollars per ton, that is to say, the export duty discounted to farmers is too high that 10% of the FOB price, then the price is not motivating enough to plant peas”, Marelli says.
Some years ago, prior to the came of President Macri, farmers were looking for alternatives to plant wheat, due to the heavy controls and regulations on this grain, especially in the Zona Núcleo (something like the US Corn Belt), where a winter crop option were pulses.
But currently, the better economic margins are reached by double-crop wheat/soybean and farmers abandoned pulse production. “We are looking for farmers that want to intensify their crop rotation to four crops in two years, planting wheat and soybean, and peas and corn. But as pulses prices remain low, it’s probably that they prefer using a cover crop like vicia instead of peas or lentils”, Marelli adds.
But the lack of a Plant Breeders Act that enforces intellectual property rights is another reason to explain the low motivation to boost pulses production. As the breeders can’t recover royalties from their self-pollinated varieties, they are not interested in bringing it to the Argentine market, and thus farmers have not a wide range of varieties better adapted to the global market demand.
And the fourth reason to explain the stagnant of peas production is related to the financial cost in the export operation. “Government is delaying the rebate of the Added Value Tax (IVA); now we are recovering the IVA of exports dated August 2018 and we can say that is a ‘quick’ rebate because other exporters wait for more time. This is a huge financial cost that harms the export operation”, Marelli comments.
But he thinks that this situation finally will be surpassed as global and local markets change its cycle. “India and China have 2,800 million people there, and they need pulses proteins for their meals. Sooner or later, this demand will boost the pulses production in Argentina, that has agroecological conditions to be part of the supply chain”, Marelli concludes in dialogue with www.eFarmNewsAr.com
Contact Marcelo Marelli firstname.lastname@example.org