I will start with a story that I use in my presentations, refers to a marriage based on a field of our immense territory, the Don Zoilo and it Doña Eulalia.
One day in 1940, tells Zoilo worried: “I hope it rains, Eulalia “. His concern then was the weather.
Time passes and one day in 1990 again concerned Zoilo says, “I hope that representatives of the Cairns Group to succeed in the GATT round in Brussels and achieve the European Economic Community which lower their subsidies and Americans do the same so that our products do not have to keep fighting against the GSM 102 and U.S. EEP bonuses, Eulalia “Zoilo in 2008 had increased its management and automation, performed till their crops and pastures, using seeds developed with biotechnology by Argentine companies, to early weaning, breeding and rearing supplemented them with rations, corn silage and balanced, finished animals poultry rations formulated by nutritional counselor, using forward markets to cover his purchases and sales cereal, inseminaba their cows and to transplant embryonic. He had bought a seed planter monitor and an exterminator with satellite navigator, the contractor had to combine with various performance monitors, precision agriculture and satellite navigation. Also had a satellite TV antenna, a signal amplifier for cellular internet, solar energy for their electrificadores. He could change his old F100 by a 4 í— 4, because the roads outside gates had not improved. With great satisfaction his two children had received a University agricultural engineer and the other as a veterinarian.
Unlike past years all that the respondent was produced with great prices. At that time he was planning new investments when the crisis occurs in the field with the famous Resolution 125. Once more he worried his wife said: “It will be true what they say we are second because they add value and should yield income for other activities that add more value, if indeed the people living in our movement.
Eulalia, what is it adding value? “
The beginnings of farming in the Republic of Argentina were based on technology inputs, labor-intensive based immigration, animal traction and primary production systems.
The goods produced were primary products such as meat and grains.
Since its inception this activity evolved into a new form of company with high level of management, process technologies, sales per screen, forward markets, etc.. He spent investment competitiveness “Hard” (supplies, equipment or “irons”, etc.). Investment “Soft” is the knowledge, training and adaptation of organizational members. Being the leading Argentine producer in the world in these respects.
The Industrial Revolution originated the production of most goods migrate artisanal industrial processes. This activity belatedly followed suit.
The problem to perceive this change on the part of consumers, especially in large urban centers, is that the final product is still in his eyes the same, no added value.
Value Chain (Michael E. Porter 1985): the interrelated set of value-creating activities that extend throughout the process, from the pursuit of sources of raw materials to the finished product is delivered into the hands of the consumer. This approach is external to the company, consider each company in the context of the entire chain of value-creating activities of which the company is only a part, ranging from the basic components of raw materials to final consumer. The key issue is to maximize the difference (value added) between inputs and sales.
If instead of seeing the meat or grain as the final product, we consider really like the end of a value chain where to obtain the them requires the interaction of multiple actors in the economy (professional, genetics, biotechnology, industrial
agrochemical, machinery, shipping, ports, fuel storage, packaging, etc, etc.) we can answer the question of Zoilo.
Don Zoilo we can discuss whether or not to add value to livestock or grain, but really no point wasting time on it. The bottom line is they are great generators of value. Their production allows, backward, generate multiple activities share in the value chain of meat or grain.
Actually to correctly analyze these activities add value to see if we should see the creation of value they produce.
They are probably mobilizing and generating activities such as construction value. Only by way of example I shall present some data published by Preserving Produce Foundation in August 2002 in a work called The Agricultural and
Agroindustrial (Lic. Gustavo M. Lopez – Eng. Gustavo Oliver): “From an economically active population (PEA) of 13,338,000 people, the Agricultural sector in regard to primary production, was an occupation of 967,000 people, representing 7.2% of the total workforce in the country. At the primary production sector must add the processing sectors of agricultural and / or livestock and other sectors supplying inputs and machinery for agriculture.They had in 1999 about 1,024,000 people PEA.
Taking the total EAP in 1999 as 13,338,000 people, goods producing sectors involved with 3,018,000 people, representing 22% of the total labor force, while the services sector involving a total of 10,320. 000, ie 77.3% of the EAP
Within the goods producing sectors, those related to agricultural and agribusiness sector, occupied in 1999 a total of 1,991,000 people or 65.9% of EAP related to the production of goods. This data clearly shows that Argentina is a country Agricultural and Agroindustrial in terms of production of goods is concerned.
It is very difficult to obtain figures of participation of agricultural activities and agro-industrial sector in the EAP services, but no one can doubt the importance which has the complex agricultural trade in services (occupying 2,852,000 persons) in the transport (667.000personas) and in financial, insurance and related services (233,000 people), totaling approximately 3,752,000 people.
According to this work , Agriculture and Agro-industrial sector in Argentina would EAP over 5.7 million people and representing 43% of total Economicmente Population (EAP) in the country. “
It is argued that traditional farming does not add value and that we should seek as a national project development through activities that generate added value. I think we should critically analyze these concepts.
My opinion is that this sector suffers from communication problems because although its importance has in general a “bad press” for ancient vision of what the activity.
We analyze the generation of value not only forward but also backward.
There is a confusion of objectives and macroeconomic and microeconomic criteria with respect to commodities. We can argue whether the development of Argentina could be given only with commodities, but from there to infer that the black sheep that does not add value and consequently
should be treated discriminatorily to subsidize other sectors more dynamic theory, is a serious error. The development of a country is the sum of sectors and not discriminate against the most dynamic and competitive for others who still fail to demonstrate its
dynamic and competitive, with the false argument that add more value or employing more people.
We should change our view of farming. The new vision of farming and agriculture is associated with the training, technology and management.Behind the production of a kg of meat or soya bean is the university, providing genetics,
chemicals, machinery, supplies, collateral services, transport, ie they are the people, trades people who work for livestock and agriculture: the turner, the rubber tree, the driver, the professional. The new livestock and agriculture are major generators of economic activity and employment. We must think of what they generate value chains. There’s a process linked.
I believe that flexibility and adaptation to new consumer requirements Argentine agricultural sector has a long future. It is a sector that needs help and encourage, is the most competitive in the world generating value, you only need
to be left to work with clear rules and without discrimination based on a vision of the activity that has been cured by what is called the Great Revolution of the Argentine Pampas and is the subject of study in foreign universities.
Eduardo Martinez Ferrario
Degree in Business Administration – UBA
Accountant – UBA
Holder of Cabaña El Amargo
Vice President of the Asociacion Argentina Braford