Argentina’s organic production. Importance & evolution of ... · Argentina’s organic...

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Argentina’s organic production. Importance & evolution of family farmers. Main market insertion strategies of Argentine organic products. Nora Liliana Puppi, Diego Esteban Pinasco; Juan Carlos Ramirez National Agri-food Health and Quality Service, University of Buenos Aires, School of Agronomy - SENASA, FAUBA- Argentina [email protected]

Transcript of Argentina’s organic production. Importance & evolution of ... · Argentina’s organic...

Page 1: Argentina’s organic production. Importance & evolution of ... · Argentina’s organic production. Importance & evolution of family farmers. Main market insertion strategies of

Argentina’s organic production. Importance & evolution of family farmers. Main market insertion strategies of Argentine organic

products.

Nora Liliana Puppi, Diego Esteban Pinasco; Juan Carlos Ramirez National Agri-food Health and Quality Service, University of Buenos

Aires, School of Agronomy - SENASA, FAUBA- Argentina [email protected]

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Argentine Republic has an official control system ü  Since 1992 under the orbit of the SENASA

ü  National Agri-food Health and Quality Service.

ü  The current system in force is third-party quality certification, like in other important organic production countries

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The certification bodies (CBs):

Must be licensed by SENASA¨- Argentina’s National

Agri-food Health and Quality Service,

CBs freely determine the costs of the certification

services the organic operators are faced with.

In some cases, these costs have been assumed by

the State as a strategy to promote the activity for

groups of small producers.

Argentine Republic has an official control system

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Organic products of vegetable origin certified and producers ü  The trend shown by the harvested area and by the

volumes of organic vegetables products certified in Argentina between 2009 and 2014 was a positive one (4% and 6%, respectively).

ü  The total amount of operators under control during the same period, fell, in average, 10% annually

ü  On the other hand, organic exports, that constitute the main destination of the production, increased 35% during that same period.

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SENASA – Dirección de Calidad Agroalimentaria Coordinación de Productos Orgánicos

Tons

Argentina.

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Argentine exports

•  2014: 169 mil tons

Destino Toneladas % EEUU 88.981 52,6%

UE 49.267 29,1%

Suiza 1.916 1,1%

Japón 616 0,4%

Others 28.333 16,8%

SENASA – Dirección de Calidad Agroalimentaria Coordinación de Productos Orgánicos

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Organic farms (OFs) under control. Mean area by farm. •  In 2009, there were 1894 OFs under control and

in 2014 there were 1217; therefore, the mean

area by farm increased at a rate of 3% annually

during that time.

•  The decrease of the number of OFs under

control causes concern for the Argentine

Government and, is a trend found in the

Argentine farming sector.

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Argentina Organic farms under control

SENASA – Dirección de Calidad Agroalimentaria Coordinación de Productos Orgánicos

Farm

s

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Argentina. Organic Farms Under control

Región Establecimientos

Cuyo 198

NEA 428

NOA 124

Pampeana 228

Patagonia 239

Total 1.217 Area under control (2014)

3.061.965 ha

SENASA – Dirección de Calidad Agroalimentaria Coordinación de Productos Orgánicos

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Objetives v The evolution of the OFs in Argentina during the

last six years is analyzed so as to infer which kind of OF is most affected by the process of concentration.

v The OFs that are still in business and their relationship with different commercialization strategies are identified. Special interest in those of a smaller size operating under the protection of various kinds of institutions.

v We assume that most of the family OFs in Argentina

fall into that stratum.

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Methods and materials v The information used was taken from data

provided to the Argentine National Agri-food Health and Quality Service by licensed CBs in the Argentine control system.

v The 2009-2014 period was analyzed. v Each record corresponds to one OF, and, it

includes: year, legal form ; fictitious name of the OF, geographic location (Province and Region ), total area (ha), area (organic) under control (ha), activity (agriculture and livestock)

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Methods and materials

After an initial analysis, three strata were established according to the surface under organic follow-up:

o  Small, OFs with a surface under 25 ha; o  Medium, with a surface from 25.1 to 500 ha, o  Large with over 500 ha.

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Methods and materials

The records were classified by legal form into three groups:

Ø  1)Corporations, which fall into administration

modes that imply a certain management of the exploitation, financial provision and level of capitalization that family farmers do not attain;

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Methods and materials The records were classified by legal form into three groups:

Ø  2) LLC and De Facto Business Associations, that could correspond to capitalized family farms, and individuals, into which family members with different levels of capitalization and small & medium-sized businessmen would be included;

Ø  3) cooperatives and associations of various kinds, as it is inferred that this last group would include the majority of the organic family farmers in Argentina.

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Methods and materials Ø  The data of size strata, legal forms,

geographical region & activity were linked so as to try to explain the influence of these variables in the evolution of the number of OFs.

Ø  Then, the ratio of OFs that continued under organic follow-up during the period was calculated, identifying those that were under control of de CBs in 2009 as well as in 2014.

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Results and Conclusions

In the three surface strata the number of OFs decreased:

v the fall was sharper in the Small and Large-sized ones (47% and 41% respectively)

v compared to the decrease of the Medium-sized ones (14%).

v thus, the participation of the Medium-sized farms raised from 27% (2009) to 37% (2014) of the total analyzed establishments.

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Results and Conclusions

q  Production is organized under different legal forms.

q  The results show us that the principal form was the corporations- the largest in number (30%),

q  Next the Producers’ Associations (28%), Individuals (27%) and LLC (9%).

q  But it is important to say that all of them decrease since 2009 to 2014.

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Results and Conclusions Legal Forms Analyzed: Regional distribution and by stratum. (2009)-2014)

Legal form Region where it is Predominant Activity Stratum

Cooperatives and

Associations (a)

The Mesopotamia Agriculture Small (a)

LLC, De Facto

Business Associations,

individuals (b)

The Pampas Agriculture

Large (b1) and Medium (b2) Small (b3) and Medium (b4) Cuyo

Northern Patagonia Small (b5) Southern Patagonia Livestock Large (b6)

Corportions and Trusts (c)

The Pampas

Agriculture

Medium (c1) and Large (c2)

Cuyo Medium (c3) and Small (c4)

Northern Patagonia Medium (c5)

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Evolution of the number of OFs, according to their legal form, stratum and by region (2009-2014)

Stratum

2009 2010 2011 2012 2013 2014 Variation

a) 447 428 338 252 215 192 -57% b1) 57 62 54 40 28 19 -67% b2) 71 65 51 37 27 28 -61% b3) 100 87 94 69 49 39 -61% b4) 52 50 56 48 49 45 -13% b5) 90 89 87 79 79 86 -4% b6) 48 51 51 43 33 29 -40% c1) 50 56 54 52 54 55 10% c2) 36 37 38 30 32 29 -19% c3) 64 65 58 61 56 56 -13% c4) 68 66 44 38 28 25 -63% c5) 53 52 41 39 32 33 -38%

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Results and Conclusions The Pampa Region, where the production is mainly annual crops (commodities), shows a decrease in all the strata of the OFs, except the group of corporations and, they are medium-sized establishments.

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Results and Conclusions In Cuyo, under the two predominant legal forms in the region (LLC, individuals), the OFs that belong to the small stratum decrease more than those of the medium-sized stratum. Therefore, their evolution (decrease) would not be related to their legal form.

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Results and Conclusions In the Northern Patagonia Region, with a production of apples and pears, very important in the Argentine exports of organic products, it is found that the OFs managed as corporations decrease more than the group of LLC, De Facto Business Associations and individuals.

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Results and Conclusions Northern Patagonia Region: it is found that the articulation of production with the foreign markets takes place through packaging facilities, like cooperatives or large exporting firms, with great insertion in the international market.

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Results and Conclusions The Mesopotamia Region, register a large decrease in number of OFs. This, would indicate that the support given by the institutions, that in some cases bear all the quality certification costs, and let the producers' insertion into the foreign market, was not enough to avoid the exit of small producers from the system.

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Results and Conclusions

Regarding the activities carried out by the OFs, ü  most of the smaller ones are in the

agricultural farms ; ü  the medium-sized establishments,

although they are mostly agricultural, some are livestock breeders,

ü  and, the large OFs are, agricultural or breeders in the same percentage.

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Results and Conclusions ü  In general, family producers would be

into the groups of associations and cooperatives, and also into the group of individuals as family producers, with different degrees of capitalization.

ü  They are raw material providers to manufacturer or packaging establishment, which assists the family producer with management, technical advice and logistics.

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Results and Conclusions

ü  Finally, it was observed that in

the analyzed period the medium OFs corporations related to agricultural activities were the most able to sustain over time.

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!Thank you ¡