Event - Presentation at SPRU and INGEGIO

OPENING UP NATURAL RESOURCE-BASED INDUSTRIES FOR TRANSITIONS

IN LAC: THE CASE OF THE AGRICULTURAL SECTOR IN ARGENTINA

ANABEL MARIN AND MAXIMIL IANO VI LA SEOANE

INTRODUCTION

AN HISTORICAL PROBLEM AND AN HISTORICAL SOLUTION IN LAC

• A reality of LAC

• We are heavily specialised NRs

• NRs are problematic! (concentration, low

employment, environmental damage, etc.)

• A common view in LAC

• We should tax them and incentive other sectors

• BUT

REGION % Exportaciones

de RNs/ Total

PBI: Tasa de

crecimiento

(1970-2008)

Latín America 70 1.64

Productores de

RNs desarrollados

59 2.29

Países en

desarrollo: Asia

30 4.77

Economías

Maduras

24 2

It is realistic?

A DIFFERENT PERSPECTIVE TO THE SAME PROBLEM

• Can we transform NR activities so they can best serve economic (resilience), social (justice) and environmental (sustainability) challenges in the region?.

• The general idea in LAC is not – sectors have intrinsic characteristics - but innovation literature, from historical studies, says yes!

• Industries get transformed and re-structured through the development and growth of alternatives/niches,

• or new projects which propose technologies and organisational practices that departure from the conventional ones.

A DIFFERENT PERSPECTIVE TO THE SAME PROBLEM

• Within each industry

• The dominant ways are the ones more widely spread that privilege from the mainstream, and are highly institutionalised, benefiting typically from a historic accumulation of technological, institutional, infrastructural and social supports.

• The alternatives are novel practices that departure from these highly institutionalised ways of solving problems, promising better outputs

• IF THEY PROSPER THEY CAN TRANSFORM, creating diversity or replacing

A DIFFERENT PERSPECTIVE TO THE SAME PROBLEM: OUR CASE

• We are exploring transformative

alternatives (or niches) in:

• The agricultural sector in Argentina,

• The Amazonia in Brazil and

• Copper mining in Chile

Dominant system and alternatives

OUR FRAMEWORK IN BRIEF

TRANSITION STUDIES

• A central problem of research within the transition literature is to understand whether, and how:

• we move from a relatively stable and incrementally innovating dominant ‘regime’ of socio-technical configurations,

• Which is problematic

• towards much more economically integrated, environmentally sustainable and socially just regimes.

TRANSITION STUDIES

• Niches (for us alternatives) play a key role in moving away from dominant regimes.

• Dominant regimes face problems, and in this way open opportunities for alternative configuration that offer solutions to these problems.

• Some of these problems arise both from macro conditions, which are known as the landscape, others derive from the very way in which the regime work.

• Niches are sources of alternative ideas, capabilities and alternatives that can help the transition

• ONE QUESTION IS HOW THEY CAN BE ENCOURAGED AND PROTECTED

TRANSITION STUDIES: AN ADAPTATION

• The focus, influenced by a European concerns, has

been on ‘transitions, from one system to another, such as the move from fossil-fuel energy sectors to low carbon

energy sectors.

• We are also interested on the creation of diversity, avoiding

lock-in through a diversity of niche options

• Niches are usually conceptualised as radical innovations

• We consider less radical ventures as well

• Transitions are usually within sectors

• We are interested also in transitions between sectors

(diversification)

METHODOLOGY

HOW DO WE IDENTIFY ALTERNATIVES?

• Problems in the dominant open windows of opportunity for alternatives

• First, we characterised the existing dominant trajectory in each case (e.g. Amazonia: coal production)

• Second, we identify the economic, social and environmental problems associated with this trajectory.

• Third, we identify alternatives as those projects/ventures that address some of the problems identified in the dominant trajectories.

0

2

4

6

8Product

Process

Technology

Type of Agent

Geographical Zone

Knowledge

Market orientation

Characteristics of networks

Project 1

Project 2

Project 3

DATA

• We use secondary data to

characterise the dominant regime

• Carry out interviews to companies and

key informants

• Conduct focus groups with producers,

consumers, civil servants, NGO’s representants

ANALYSIS

THE DOMINANT AGRICULTURAL SYSTEM IN ARGENTINA MAIN FEATURES

• Technical and organisational aspects

• Extensive, and Input intensive:

• Transgenic seeds

• Biocides

• Fertilizers:

• Contratists organise production

• Market driven – low state intervention

• Export oriented

THE DOMINANT AGRICULTURAL SYSTEM IN ARGENTINA MAIN CHALLENGES

• Concentration!!

• Economic: in large farms, between 1992 and 2002, 87.688

farms disappeared, small and medium (300000)

• Of activities: soybean (a commodity) area has increased at

the expense of dairy, maize, wheat, fruit and livestock

production,

• Of knowledge: a few MNcs control most technology

embodied in the inputs (GM seed, herbicides).

EXAMPLES, CONCENTRATION OF ACTIVITIES

• 2003/2004 , 13.7 million hectares of soybean were planted but there was a reduction of 2.9 million hectares in maize and 2.15 million hectares in sunflowers, among others.

• The area before dedicated to cotton drop 12 times, the area dedicated to cattle lost 13.5 millions in the Pampas, and 30% of dairy farms disappeared.

• The cattle production lost 3 million units, the potato harvest fell between 1997/98 and 2001/2 from 3.4 million tons to 2.1 millions, green peas from 9.000 tons to 1.800 tons, lentils from 9.000 to 1.800 tons


• Low creation of employment in the country

side, 2 workers per 1000 hectares

• Environmental damage (deforestation, high

consumption of water and energy, soil

destruction)

• Health risks, Caused by the use of the

herbicide, and the use of GM in food


• Examples of environmental damage

• Soil erosion: A a strong decline in soil fertility, turning some of them unusable (Altieri & Pengue, 2006). For example, the continuous nutrients extraction needed in the soybean harvest might lead to heavy nitrogen and phosphorus scarcity that will limit the soil productivity (Pengue, 2001).

• Deforestation: For example, in Chaco, Argentina, 118.000 hectares have been dismounted in 4 years (1998-2002) to produce soybean, 160.000 in Salta and 223.000 in Santiago del Estero (Altieri & Pengue, 2006).

• Loss of species and biodiversity: Argentina is a country with medium biodiversity, that has the second largest South American ecosystem, the Gran Parque Chaqueño, with more than 1 million km2 size. The soybean expansion is seriously threatening the country´s biodiversity (Pengue, 2010).

ALTERNATIVES?

• Path- breaking, propose a radically different way of doing things, so if they prosper they could take the industry in a different direction of change - or pathway.

• Path-repairing, offer partial solutions to some of the problems of the dominant regime, but do not challenge its main logic of development

• Path creating create new pathways for innovation in other sectors linked to the dominant one

ALTERNATIVES: EXAMPLES UNDER STUDY

• Path breaking: Coopsol: associative venture that

produces organic honey (and other products) in a

non Pampean region

• Santiago del Estero, a province with high poverty indexes,

weak productive system and high emigration rates. It was

created in 1992, has 14 associates and works with 100

producers, 38 of whom have 1.390 organic certified hives,

• The consortium export part of their production to

foreign markets, like Italy.

• Apart from the organic certification, they also

achieved the “FairTrade” certification.


• How different are they from the dominant?

• Products they represents diversification of production towards a not commodity

• Process and technology, agroecological/organic principles, fair trade

• Knowledge, dispersed, less concentrated, the whole project is about diffusing knowledge

• Geographical: poor areas in the north

• Type of agents and industrial organization: associations of very small producers

• GO BACK TO PICTURE


• Path repairing:

• Agricultores Federados Argentinos is a first level

cooperative founded in 1932, located in the heart

of the “pampa húmeda” region.

• The cooperative is known for having one of the

largest capacities in the country to originate grains,

gathering an order of 3.400.000 annual tons.

• Facturación 1,4 millones de dólares años (70 %

cereales y 30% industrial);

• 33 mil socios; cubre mas o menos el 5% de los

granos del país

Source: Bisang & Fuchs, 2011.

Path Repairing

Importance of manufacturing

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Crops 67.5 66.3 71.4 70.9 71.4 73.5 71.4 63.2 68.5 59.7

Direct exports 11.8 15.0 13.1 12.6 11.2 9.5 9.9 15.8 11.9 20.5

Cattle 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2

Agricultural inputs 10.0 8.4 6.0 7.5 8.3 8.3 9.7 10.4 9.0 8.8

Seeds 2.7 2.5 2.1 2.2 1.7 1.6 1.9 1.6 1.5 1.7

Biodiesel 2.4 2.1 2.2 1.9 1.9 1.9 1.5 1.6 1.5 2.1

Food animal 0.5 0.3 0.4 0.5 0.5 0.6 0.5 0.6 0.5 0.5

Cooking oil 5.0 5.4 4.8 4.4 4.9 4.5 5.0 6.7 7.1 6.6


• Path creating:

• A Seed producer: • BIOCERES

• Created in 2001 by a co-operativa of producers (2001)

with he idea of taking advantage of the scientific

infrastructure of the country to develop

biotechnological events adapted to the Argentinean

agro-ecoological conditions.

• The venture has now 30% of the seed market in Argentina and three patented genes

QUESTIONS EXPLORED

• How widespread the selected alternatives

have and can become, via the creation of

institutions, involvement of consumers,

policy support, diffusion from one to another

alternative, etc.?

• Which are the main barriers that block that

the alternative does not become more

widespread?

FINAL REMARKS

BARRIERS TO GROWTH, AND REPLICATE

• Economic 1 (Macro): The economic importance of

the dominant system for the Argentinean economy

• Huge contribution to taxes and external currency

• Argentina is now the second world exporter of crops, the first

world exporter of soy and sunflower oil, flowers and pellets.

• Around 30% of all exports,

• The direct contribution to tax revenue is 8% (Argentina tax

exports of all its agricultural products heavily).

• ANYTHING THAT CHALLENGE THIS SECTOR, BY FOR INSTANCE

REGULATING SPRAYING IS SEEN AS CHALLENGING THE ENTIRE

ECONOMY


• Economics II (micro). Input intensive monocrop,

solutions are simple (in a manual), and proved, and

in the short term

• Efficient: they allow the earning of high yields and

costs reduction

• because they benefit from scale economies and

positive network externalities

• All MNCs and domestic firms in the GM business,

have very well developed extension systems to

spread the technology


• Existing Capabilities mostly related to the

dominant regime, e.g. agronomists mainly

provide advice about input intensive

solutions, do not know much about

• Existing Infrastructure. e.g. machineries can

only be used in organic if clean.. but they

are mostly contaminated


• Institutions. Government regulations and subsidies,

associations, etc.

• IPR regulations in Arg. have been designed to protect the

interests of the MNCs in the business but not to promote and

protect access to and diffusion of knowledge

• The Ministry of Agriculture is 99% committed to the dominant

regime, alternative practices such as organic, occupy a

marginal place, or are treated in assistance plans

• INTA sees organics and agro economic practices as providing valuable knowledge for the dominant, but not as

options


• Politics and power. Incumbents important positions

in the current system.

• The Argentinean agricultural system assures that the voices

of big business are heard by providing companies, such as

Monsanto, Singenta, Dow and Bayer a place in the

discussions of Conabia (the main body responsible for GM

approvals).

• There are at least three of four large associations, exclusively

dedicated to promote the use of ZT technologies and GM

seeds

Documents

Event - Presentation at SPRU and INGEGIO