Potato farming in Argentina has become an increasingly unsustainable activity for many producers, as rising costs and falling market prices put the future of the sector at risk. According to Mario Raiteri, counselor at Coninagro and vice president of the National Federation of Potato Producers, the situation is dire, with producers losing up to USD 1,500 per hectare. This financial strain is compounded by low seasonal demand and an oversupply in the market.
Economic Pressures on Potato Farming
In recent weeks, the market price for potatoes has fallen significantly. Producers are receiving around 2,200 pesos per 20-kilogram bag, which translates to approximately USD 5,500 per hectare. This amount falls short of the production cost, which ranges between USD 7,000 and USD 9,000 per hectare, depending on the technology used. Costs include land rental, certified seeds, fertilizers, and irrigation, with the latter requiring up to 250 liters of diesel per day for 70 to 90 days of cultivation.
Raiteri highlights that the production process, despite technological advancements, still relies heavily on manual labor. These added expenses further strain producers’ financial viability.
Regional and Industrial Dynamics
Argentina cultivates around 85,000 hectares of potatoes annually, yielding approximately three million tons. The southeast of Buenos Aires province, including areas like Mar del Plata, Balcarce, and Necochea, accounts for nearly half of this production. Other significant regions include Córdoba, Tucumán, and Mendoza. The production is split between domestic consumption and export, with 25-30% of the yield processed into frozen fries, chips, and other products.
Despite the presence of four major companies that stabilize the market by absorbing a significant portion of the yield, smaller producers face severe challenges. The high costs of production and limited access to favorable credit terms from banks, which view the sector as high-risk, exacerbate the uncertainty surrounding the upcoming planting season.
Future Prospects and Sustainability
The potato sector’s sustainability hinges on addressing these financial and structural challenges. Improved access to credit, technological innovation, and better market conditions are essential for long-term viability. Moreover, fostering stronger partnerships between producers and industrial processors could help stabilize prices and reduce volatility.
The financial losses and market pressures faced by Argentina’s potato producers underscore the need for systemic reforms in the sector. Without immediate intervention, the livelihoods of hundreds of farmers and the sustainability of potato farming in the country remain in jeopardy. Addressing these challenges through collaborative efforts between producers, policymakers, and industry stakeholders will be crucial for securing the future of this vital agricultural sector.
