Perilous
Times and Climate Change
Continuing S. American drought devastates corn harvests
by Staff Writers
Rio De Janeiro (UPI) Jan 31, 2012
Continuing Drought in Central and South America is affecting corn
yields, a boon for U.S. corn exporters but a cause of major
worries for agriculture traders in Argentina, Brazil, Paraguay,
Uruguay and Mexico.
Dry conditions blamed on La Nina weather phenomenon caused
political wrangles in Argentina, led to a state of emergency in
parts of Paraguay and relief measures in other countries.
Argentina is the world's second largest corn exporter after the
United States.
Argentine President Cristina Fernandez de Kirchner is facing
farmer unrest over allegations her government's relief program is
too little too late for many communities affected by drought.
Argentine agriculturalists said La Nina could diminish corn yields
in the country by 2 million tons.
U.N. Food and Agriculture Organization economist Liliana Balbi
said current projections reduced estimates for Argentine corn
yields from 23 million tons last year to 21.4 million tons this
year.
Corn yields in southern Brazil are down about 1.5 million tons.
South Brazil accounts for more than 60 percent of summer corn
exported by the country, the world's third largest exporter.
The drought has caused political disruptions, more so in Argentina
than in other Latin American countries. Relations between
Argentina's government and importers soured after Fernandez
slapped new taxes on traders and refused to budge in the face of
furious demands for change.
Fernandez also upset farmers' groups after ignoring demands for
more emergency aid to drought-stricken areas of the country.
The latest potential political flash point was caused when the
government refused to defer new legislation that importers
denounced as punitive, restrictive and wrapped in red tape.
Further complications arose after trade partner Brazil,
increasingly under pressure over drought damage to its own crops,
objected to new Argentine rules coming into place. Argentina and
Brazil have $30 billion-a-year trade.
Critics say the new rules, going into effect next month, will
introduce more bureaucratic delays. Manufacturers said the rules
would inhibit industrial production and growth as they would
likely impede the flow of components, raw materials and other
industrial inputs.
Brazilian Foreign Trade and Industry Minister Fernando Pimentel
declared that in contrast to amicable political ties the "trade
relations with Argentina are a permanent problem." Brazilian media
criticism of Argentine trade policies has gained momentum amid
calls for retaliatory steps.
The government of Brazilian President Dilma Rousseff has said it
wants to wait and observe till March before taking countermeasures
against Buenos Aires.
The influential Sao Paulo Federation of Industries in Brazil said
the new Argentine import rules could affect 80 percent of
Brazilian exports to the country.