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Crazy policies and climate change are hurting Latin America’s agriculture

Wbillions The black bug invaded Buenos Aires in March, leaving locals baffled. Questions abounded on social media. They turned out to be thrips, leaf-gnawing insects that had fled the arid Argentine countryside for better-watered urban gardens. They do not pose a threat to humans. But the extreme weather that prompted their exodus did.

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Across Latin America, climate change is making it harder to grow crops. This could have two worrying consequences. Alleviating rural poverty will be more difficult because small farmers will find it harder to make ends meet. It could also affect global food supplies, since Brazil and Argentina alone provide a tenth of world wheat exports and a third of coarse grains (barley, corn, oats, rye and sorghum).

No model can reliably predict farm yields because future technological changes are unknowable. However, the IDB takes an average of nine climate models and combines them with crop and economic models to come up with some estimates. It projects that growth in regional agricultural production will be 5 percentage points lower by 2050 than it would be without climate change. Meanwhile, the region’s population is projected to grow by 14 percent between now and a peak around 2056.

Such headline figures belie huge differences. Stretching over 10,000 kilometers from north to south, the region spans deserts, mountains, tropical rainforests and the open pampas. Growing conditions for corn, a particularly heat-sensitive crop, will get worse almost everywhere, while soybeans, a more hardy plant, will likely improve (see map). Wheat production may have to move south.

Roughly speaking, the hot and dry regions of the Andean countries, Central America and Mexico (the largest supplier of vegetables to the United States) are likely to become drier. This will make life more precarious for the rural poor and could trigger mass migration and even unrest. In contrast, the temperate “Southern Cone” of Argentina, Chile, Paraguay and Uruguay may be better suited to growing crops such as soybeans and rice, creating opportunities for large commercial farmers to increase yields. The main obstacle to seizing this opportunity is that Argentina, the largest producer in the Southern Cone, has some of the craziest agricultural policies on earth. Meanwhile, in Brazil, another agricultural powerhouse in the region, the extent of the pain will depend largely on what happens to the Amazon rainforest. Across the region, the fortunes of large and small farmers will be very different.

“The climate is out of balance. When we look forward to one season, another will come,” said José Adrián Reyes, a small tomato and chilli farmer in the Honduran highlands. His hometown illustrates the brutal truth that the places hit hardest by climate change will be those least able to cope, not least because the hottest regions are also often the poorest.

Hot, poor, and sandwiched between oceans, Honduras is battered by increasingly violent hurricanes and suffering worse droughts. The Inter-American Development Bank predicts that average maize yields could be 9 percent lower by 2050 than they would be without climate change. This is a recipe for social unrest.

If lower production translates into higher prices, it will hit the urban poor, who in Honduras eat tortillas for nearly every meal. Harsh growing conditions will hurt small farmers, of which Honduras has a large number. (About 29 percent of workers in Honduras grow stuff, double the figure for the region as a whole.) Poor small farmers find it difficult to adapt, not only because they lack money but because they are rationally reluctant to experiment. Generations of experience have taught them that if they try something unfamiliar and fail, they will face poverty, so they tend to stick to what they know.

Ultimately, however, they will have to adapt, either to find another job or to join the immigrant ranks making the long trek to the United States.Many Hondurans have immigrated, sending home the equivalent of a quarter of their money each year gross domestic product. Climate change will spur millions of people to move from the countryside to the cities in the coming decades.

Fear of mass migration is one reason the U.S. is backing programs to help small farmers in Latin America use water more efficiently. Those who rely on clouds to water their seedlings are especially vulnerable when rains are scarce.In Mr. Reyes’ village near La Esperanza, the government invested $260,000 United NationsThe International Fund for Agricultural Development has produced 50 kilometers of irrigation pipelines, benefiting more than 1,000 families. Farmers produce more on less land and switch from basic crops like corn and beans to more profitable crops like vegetables and berries.

Larger farmers in the cooler parts of the region should find it easier to adapt. Argentina — vast, fertile and mostly temperate — is already the world’s third-largest soybean exporter and second-largest corn exporter. Climate change will hurt some Argentine farmers — mainly those in the north. But higher rainfall should boost soybean, rice and irrigated wheat production across large swathes of the country, especially in the south. And because Argentine agriculture is dominated by tech-savvy modern farmers, the country should be able to increase yields.

However, Argentinian farmers are in low spirits as the same drought has caused thrips to swarm Buenos Aires. In the last four months of 2022, parts of Argentina will receive less than half their normal rainfall.A study of world weather attribution non-governmental organizationThe conclusion was that this was likely the result of natural variability rather than climate change, but that very high temperatures, possibly caused by climate change, made the drought more painful.

A group of farmers sit around a table in an impressive farmhouse near Rosario in the north. Polo mallets hang on the wall. Exquisite apple cake greets visitors. But vast fields were dry, and wheat production was down 65 percent. Farmers are willing to invest in new technologies to adapt to climate change. Like most large farmers in Argentina, they have embraced GM crops with excellent results. Unfortunately, they must constantly respond to government policies that are as unpredictable as swarms of locusts. “You can’t plan for the next five years because you don’t know what’s going to happen next month,” said Federico Boglione, who owns the farm.

Some crops face export quotas. All face heavy export taxes.There are many exchange rates us USD, depending on the crop you are exporting. Exporters must hand over dollars at roughly half their value at the main official exchange rate. Naturally, they resented it. Last year, soybean farmers held on to their harvests, hoping the government would eventually be forced to devalue the local currency. (Inflation in Argentina is over 100%, so even unrealistic exchange rates have to be adjusted from time to time.)

Desperate for hard currency, the government offered a special rate for soybean exports, worse than the black market rate but better than the official rate, and said it would only be available for a month. The aim is to entice farmers to sell their beans. It worked, but only for a month. So a few weeks later, the government is again offering soybean rates; a third rate will be introduced this month. On March 31, the government also introduced a separate exchange rate for wine exporters, known as the ‘Malbec dollar’.

In theory, farmers could buy imported inputs such as fertilizers in dollars at the official exchange rate. In practice, the process of obtaining cheap hard currency is slow and corrupt. Large farmers often have to barter—so many tons of wheat for a combine, etc.

It is estimated that by 2032, smart policies could boost annual food production from 140 million tonnes today to 215 million tonnes, a 53% increase Fada, a think tank. That’s enough to feed 400 million people. Many researchers are happy to help. Argentine biotech company Bioceres has developed a new drought-tolerant wheat variety that yields 30-40% more than traditional varieties when rains dry up. Some 50,000 hectares are planted in Argentina; it received regulatory approval in Brazil in March.

soybean scene

Brazil, another large agricultural country in Latin America, has both active commercial large farmers and non-productive small farmers. The former generate two-thirds of farm income; the latter account for three-quarters of agricultural jobs. Large farms are actively adopting technology to fight climate change and reduce their own carbon emissions. Small countries are less able to do so and are in places where the effects of climate change are likely to be more severe.

Agriculture is also a major driver of deforestation, which also contributes to CO2 emissions2 emissions, which may more directly affect weather patterns. Each giant tree in the Amazon spews more than 400 liters of water into the air each day, which is recycled as rainwater that nourishes the forest itself and the vast agricultural lands to the south. If more than 20-25% of the original trees were destroyed (a fifth has disappeared in the past 50 years), this water cycle could be disrupted and the rainforest could be turned into savannah. This could spell disaster for agriculture across the region.

Policies can get better. Brazil recently replaced a president who supported the logging of the Amazon with one who was determined to stop it. Argentina has a chance in October to replace its crackdown on big ranchers with a more rational one. “The big question,” says Manuel Otero of the Inter-American Cooperative Institute for Agricultural Research, “is: Are we saving the planet in time, or are we falling behind what’s happening on the ground?”

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