-Analysis-
BUENOS AIRES — Everything suggests that in the future, the world may want practically anything Argentina can produce. The question is whether the response to this demand should be simply augmenting current productivity, or seeking wholly new approaches.
Recently, we noted that China, the chief trading partner with which Argentina has just clinched a meat exportation deal, is about to adopt policies that could eventually cut its meat consumption in half. Beijing appears motivated by environmental concerns, in light of meat production's elevated carbon footprint. This is an interesting question from various viewpoints but the most important is perhaps that this is the first such policy on this scale concerning the environment and climate change. It comes from a party that has so far avoided involvement in environmental debates.
Is this the start of a trend? And if so, will other markets and countries take the same direction?
Farmer in Northern China — Photo: Markus Raab
Environmental footprints, or lack thereof, may be bound to turn into future growth patterns and access to markets. The scale of negative data reaching us from those who are gauging the state of the world's environment should lead us to think that this is indeed the emerging trend, regardless of what is being said right now. One may assume there will be more restrictive scenarios in the future, not just for meat but in other food and energy sectors.
Our livestock farming has a far more limited environmental impact.
In the long run, this should be seen as a great opportunity for Argentina, and we should start to pursue it now, so the future does not take us by surprise. There are indicators today showing that our livestock farming has a far more limited environmental impact than standard practices elsewhere, and the consensus is that our productive systems have fundamental sustainable bases. The Argentine approach to agriculture — tilted toward a bio-friendly output — provides a competitive edge over most other countries.
This comparative advantage should extend beyond just business. Rather we should make it a means of exploiting coming market trends and of generating internal transformations needed to reindustrialize the country and beat poverty.
The bio-economy entails exploitation of renewable natural resources, in farming especially but also in "upstream" chains like agro-industrial production (processed foods, biofuels and medicinal products), or "downstream" through the manufacturing processes utilized in the farming. Downstream products fed into the bioeconomy include chemical fertilizers, capital goods (like farming machinery) or a range of services required to add value and make the sector more sustainable (including "bio-inputs," like organic fertilizers).
Much of all this is already in place, and the question now is to adopt an integrated, wholistic approach. This would articulate the primary, secondary and tertiary activities of the bio-economy within the context of productive and trading policies serving an overall objective. Synergies among the parts should be exploited and competitive edges in respective markets maximized.
It is no longer about doing more of the same, but laying the foundations for a sector built for the coming world.
