Soybean boom in Uruguay lead by Argentina’s high export taxes
(San Juan, Puerto Rico) May 04, 2012 - Soybean production in Uruguay increased from less than 100 km2 to over 8,000 km2 in less than 10 years as a consequence of high soybean export taxes in Argentina, according to a study recently published in Environmental Conservation.
Uruguay, a small country of 3.2 million inhabitants, is becoming a big soybean producer. The Pampas or native grasslands of Uruguay and many traditional crops such as sunflower and wheat are increasingly being converted to soybean. And the underlying cause for the soybean boom in Uruguay lies with the country’s western neighbor, Argentina, reported a group of researchers from the University of Puerto Rico and Sonoma State University in California.
“We initiated the project to show the impact of exotic tree plantations, but we were shocked to find that the area of plantations declined, while soybean fields were exploding,” said Dr. Mitchell Aide the PI of the NSF-Coupled Natural and Human Systems project.
Dr. Daniel Redo, the study’s lead author explained, “The major cause of this soybean explosion is the high export taxes in Argentina and lack of export taxes in Uruguay, which created a strong incentive for Argentinean soybean farmers to expand their operations into Uruguay”.
To understand how national and international economic, agricultural, and forestry policies affect land-use dynamics in Uruguay, these researchers analyzed satellite imagery from 2001 to 2009. The results showed that land change in Uruguay is an excellent example of how both internal and external policies affect landscape dynamics. Internally, the implementation of the 1987 and 1998 Forestry Laws stimulated a rapid expansion of Eucalyptus and pine plantations in Uruguay.
“During the 1990s, it seemed that tree plantations were going to take over Uruguay”, reflected María José Andrade-Núñez, co-author and PhD student. “During this period, NGOs, environmentalists, and social scientists sounded the alarm that Uruguay would become one vast plantation. But, once subsidies and tax breaks disappeared the plantation boom slowed quickly” she explained.
What turned out to be much more difficult to appreciate was the indirect effect of Argentinean politics. As the Kirchner’s repeatedly increased the agricultural export tax, farming soybeans in Uruguay became more and more attractive. So attractive that Argentinean investors control over half of soybean production in Uruguay and soybeans surpassed wheat as Uruguay’s most important crop.
It is unlikely that this trend will slow soon; new Uruguayan policies are promoting biodiesel production using soybeans. And it is likely that tree plantations will also make a comeback given the establishment of the world’s largest pulp mill in Uruguay.
“The main message is that subsidies and taxes are huge drivers of land change”, emphasized Dr. Matthew Clark, co-author and remote sensing scientist.
Redo, D., T. M. Aide, M. L. Clark, and M. J. Andrade-Núñez. 2012. The impact of internal and external policies on land change in Uruguay, 2001 to 2009. Environmental Conservation 39:122–131. (Tropical Community Ecology Lab http://tcel.uprrp.edu/Publications.html)
Dr. T. Mitchell Aide (for English)