Chapter 7. Sustainability of Argentina’s agricultural transformation

Argentina’s agriculture sector has transformed at an accelerated pace in recent years with new technologies and the expansion of the agricultural frontier. This has opened new opportunities for the sector but has increased environmental pressures. The trends in the agri-environmental indicators reveal that most of these pressures are still lower than in OECD countries. However, deforestation rates in Argentina are high and the use of pesticides per area of cropland has risen at rates well above the OECD average. In the context of reducing export taxes on the main exporting commodities, it is important to strengthen the Native Forest Law and good environmental practices on the use of pesticides and rotation, potentially incorporating targeted instruments to enhance the responsibility of producers in reducing negative agri-environmental externalities.

    

7.1. Potential environmental impacts of the technological package for crops

Argentina’s agriculture sector has transformed rapidly since the 1990s from an extensive and semi-pastoral system to a more intensive one based on double cropping, genetically modified (GM) varieties and no-till (NT) practices. Comprehensively assessing the environmental impacts of this transformation is a complex task due to the diversity of elements in the technological package and of ecosystem and production patterns that vary continuously due to changes in market and weather conditions. This subsection attempts to assess these potential impacts based on available studies, including an overall assessment of the package, and a separate assessment of its two main components: GM and NT practices.

Overall assessment

Overall assessments for Argentina indicate both potential negative and positive environmental impacts of GM-NT adoption. Firstly, on deforestation: the package is associated with higher deforestation rates and higher greenhouse gas (GHG) emissions compared to non-GM technologies. The main channel is related to the high profitability of such package and the possibility to cultivate soybeans in dry areas (Zak et al., 2008[1]; Phélinas and Choumert, 2017[2]). Secondly, GM-NT is likely to increase pesticide use per unit of land, but lower pesticide risk due to the use of less hazardous substances. Thirdly, dissolved phosphorus runoffs are also likely to increase in the absence of good agricultural practices. Finally, positive impacts of GM-NT include reduced soil erosion, increased soil carbon content in shallow layers, and decreased particulate phosphorus runoff.

Vigglizo et al. (2011[3]) focused on the impacts of the overall transformation of Argentina’s agriculture sector and concluded that, compared to the less intensive model prevalent in the 1960s, the new model presents larger net GHG emissions, higher habitat intervention, lower carbon (C) stocks, and lower nitrogen (N) and phosphorus (P) in soils. GHG emissions increased mainly due to higher deforestation and increased burning practices to manage grassland, despite a reduction of GHG emissions in the Pampas region due to no-till practices. The habitat intervention increased due to a higher expansion of the agricultural frontier. While C soil stocks tended to improve due to no-till practices mainly in the Pampa region, C stocks in biomass decrease with deforestation. Pesticides risk decreases due to a substitution of organo-chlorinated products by phosphorated ones and hypermetrines.

A comprehensive analysis of the long-term sustainability of the GM soybean specialisation system of Argentina (Phélinas and Choumert, 2017[2]) found environmental threats: water and air quality are compromised by pesticides, in particular, Endosulfan has been found in high concentrations in groundwater and air1. The adoption of the new technological package tended to increase productivity and, when not combined with good agricultural practices, deforestation and monocropping, potentially impacting GHG emissions, biodiversity, water availability and soil health.

Herbicide tolerant GM varieties

Meta-analysis as well as studies conducted in Argentina suggest that cultivating GM crops decreases the use of pesticides compared to non-GM varieties (Viglizzo et al., 2011[4]; Klümper and Qaim, 2014[5]). A global assessment of the differences between GM and non-GM crops on pesticide use, pesticide costs, yields and profits found that herbicide tolerant GM do not use more pesticide than non-GM crops, but tend to decrease costs and increase yields (Klümper and Qaim, 2014[5]). An empirical analysis based on interviews with farmers detected that GM soybean lead to higher number of herbicide applications but to lower toxicity of herbicide used compared to conventional soybean (Qaim and Traxler, 2005[6]). Increased applications are also related to the adoption of no-till practices, which contribute to the increase in pesticide use per hectare.

No-till practices

No-till has been shown to decrease particulate phosphorus (PP) runoff but can lead to higher dissolved phosphorus (DP) runoff (Dodd and Sharpley, 2016[7]); it is also associated with higher pesticide use due to a higher presence of weeds (Qaim and Traxler, 2005[6]). Wingeyer et al., (2015[8]) find that the adoption of NT is linked to reduced losses and sometimes increases in soil organic carbon (SOC) and particulate organic carbon (POC) in soil layers at 0–5 cm depth. At deeper levels no benefits of NT were found. Decreasing erosion rates, improved carbon content in soils and reduced surface runoff were detected in fields under NT compared to fields under conventional management (Casas, 2018[9]; Vázquez Amábile, Feiguin and Fritz, 2018[10]). Some authors highlight that no-till should in general not lead to higher chemical use but does so when used in monocropping systems (Friedrich and Kassam, 2012[11]). Inclusion of a 3-year pasture in the rotation after 7–8 years of grain crops could restore SOC and POC contents to levels before cropping (Wingeyer et al., 2015[8]).

7.2. Agri-environmental indicators reveal lower environmental pressures than in the OECD

Since 2004 agriculture production in Argentina has increased more rapidly than in other countries. Nevertheless, agriculture sector Total Factor Productivity (TFP) growth is lower than the world average, despite the good performance of the crop sector. Arable land has significantly expanded, by 41% since 2000. Even if the level of environmental pressure is lower than in other countries, it has increased during the last few decades of agricultural transformation.

On average, environmental pressures remain low compared to OECD countries but some risks are observed in terms of increased pesticide use. Nutrient balances, while positive, are still at low levels compared to OECD ones. Water use, direct on-farm energy consumption and GHG emissions levels (excluding land use, land use change and forestry [LULUCF]) are also still below OECD countries (Table 7.1). While pesticide sales per unit of agriculture land are lower than in OECD countries, their rate of growth is increasing.

Table 7.1. National agri-environmental performance compared to the OECD average
2012-14 averages or nearest available period

Indicator

Unit

Argentina

OECD

Agricultural production volume

Index (2004-06=100)

115

123

Nitrogen balance

kg per hectare

4.4

65.9

Phosphorus balance

kg per hectare

1.8

6.5

Pesticides sales

kg active of ingredients per ha

1.40

2.56

Direct on-farm energy consumption

tonnes of oil equivalent per ha

0.024

0.213

Water use

1 000 m3 per ha

0.19

0.71

Greenhouse gas emissions

tonnes of CO2 equivalent per ha

0.64

3.12

Note: Argentina data for nutrient balances are preliminary. Argentina greenhouse gas emissions refer to 2012. The OECD figures of total factor productivity and agricultural production volume reflect world averages.

Source: OECD Agri-environmental Indicators database (2017).

Environmental pressures related to the intensification of Argentina’s agriculture sector have increased at larger rates than in OECD countries. The increase in pesticide has surpassed the rate of growth of agricultural TFP, indicating no decoupling for this indicator. Pesticide sales, phosphorus balance and water-use intensity increased more than 1% annually in the period 2002-14. Particularly significant was the increase in pesticide sales. Greenhouse gas emissions (excluding LULUCF) slightly decreased in the period analysed (Figure 7.1).

Figure 7.1. Environmental pressures from agriculture are increasing in Argentina
Average annual per cent change 2002-04 to 2012-14, or nearest available period
picture

Note: Preliminary estimations are provided for Nitrogen and Phosphorus balance. Nutrient balances consider all agriculture land: pastures and cropland. Greenhouse gas emissions excludes LULUCF emissions. Nutrient balances, direct on-farm energy consumption, water use, greenhouse gas emissions and pesticide sales are calculated per unit of agriculture land. The OECD figures of total factor productivity and agricultural production volume reflect world annual growth rate averages. OECD average for pesticide use per ha excludes Denmark, Finland, Germany, the Slovak Republic, Sweden and Great Britain due to compatibility issues for data before 2010.

Source: OECD Agri-environmental Indicators database (2018). USDA Economic Research Service Agricultural Productivity Database for Total Factor Productivity. Pesticide sales for Argentina were retrieved from (FAO, 2018[12]) as a proxy for pesticide use.

 StatLink https://doi.org/10.1787/888933908172

Fertiliser and pesticide use is on the rise

Fertiliser use has increased but remains low compared to regional and global levels. P fertiliser use could be increased to replace P deficit from increased P crop uptake, but care should be taken in terms of potential P runoff. Fertiliser sales per unit of cropland (excluding pastures) have increased from levels below 5 kg/ha in the 1990s to almost 15 kg/ha for P and19 kg/ha for N in 2014 (Figure 7.2). Such levels are still below those of Brazil, but already above the OECD average for P although some authors have stressed that P fertiliser applications in cropland (excluding pasture) have not been sufficient to replace fertiliser uptake by crops (Viglizzo et al., 2011[3]).

Figure 7.2. Fertiliser use shows a positive trend in Argentina
kg/ha of cropland
picture

Source: OECD Agri-environmental Indicators database (2018).

 StatLink https://doi.org/10.1787/888933908191

Excluding pastures, pesticide sales per unit of cropland are higher in Argentina than OECD countries and Brazil (Figure 7.3), although most common imported pesticides are only slightly or moderately hazardous.2 As a result of the transformation of agriculture in Argentina, the importation of pesticides is on the rise.

Pesticide active substances imported are not among the most dangerous, and most of them are only slightly or moderately hazardous. In 2017, Atrazine represented nearly 7% of total imported pesticides (Table 7.2). This herbicide is widely used worldwide but is highly persistent, which poses potential human health risks in drinking water; it can also affect other vertebrates (Hayes et al., 2010[13]). Attention should be paid to monitoring Atrazine concentrations in water and, more in general, pesticide risks on human health and the environment. Used in excess, pesticides can lead to biodiversity loss and ecosystem degradation, as well as negative and severe effects on human health (OECD, 2019 forthcoming[14]). Pesticide active substance imports are dominated by glyfosate (55% of total imports), which is mainly used for soybean production (Table 7.2). While some studies have found few traces of pesticides concentration in groundwater in some basins (Vázquez Amábile, 2017[15]), additional monitoring efforts are needed to assess the risks of pesticides concentrations in water courses and groundwater sources and to identify hotspots.

Figure 7.3. Pesticide intensity in cropland is higher in Argentina than in other countries
Pesticide use per ha of cropland (kg of active ingredient/ha)
picture

Source: Pesticide data for OECD countries comes from OECD Agri-environmental Indicators database (2018) and comprises pesticide sales. Data for Brazil and Argentina was retrieved from (FAO, 2018[12]) and indicates use.

 StatLink https://doi.org/10.1787/888933908210

Table 7.2. Imports of pesticide active substance
Top 10 most imported formulated pesticides, 2017

Active substance

1 000 Tn

FOB million USD

WHO class

Share to total pesticides imports in Tn

Glyphosate

153.3

374.9

III

55.1%

Atrazine

18.7

92.8

III

6.7%

Paraquat

15.5

36.6

II

5.6%

2,4 D

8.9

18.9

II

3.2%

S-Metolachlore

8.7

47.1

III

3.1%

Metolachlore

6.9

26.3

III

2.5%

Clethodim

5.2

34.9

NA

1.9%

Mineral Oils

4.3

2.9

U

1.6%

Acetochlor

3.4

9.8

III

1.2%

Mancozeb

2.2

6.2

U

0.8%

Note: World Health Organisation (WHO) classification is Ia = Extremely hazardous; Ib = Highly hazardous; II = Moderately hazardous; III = slightly hazardous; U = Unlikely to present acute hazard in normal use; NA = Not available.

Source: Servicio Nacional de Sanidad y Calidad Agroalimentaria.

Deforestation and biodiversity have been affected

From 1990 to 2015 Argentina lost 77 000 km2 of forests, or 22% of its forested area in 1990 (348 000 km2) – an area equivalent to the size of San Luis province. Another study estimates that 40 000 km2 of forested land were lost due to agriculture in the period 1990-2005 (De Sy et al., 2015[16]). Contrary to regional and global deforestation trends, Argentina has increased its deforestation rate in the last fifteen years: from 1990 to 2000 the annual deforestation rate was 0.8%, but from 2000 to 2015 it reached 1% – a rate three times higher than average deforestation rate in Latin America and nearly twelve times higher than the world average (Figure 7.4). According to the Ministry of the Environment (Ministerio de Ambiente y Desarrollo Sustentable, 2016[17]) deforestation rates have been declining since 2007 and in the period 2014-15, the deforestation rate was estimated to be 0.7%.

Deforestation has been mainly occurring in the regions of Santiago del Estero, Salta, Chaco y Formosa. In the period 2002-06, deforestation rates in the regions of Parque Chaqueño (which comprises the provinces of Formosa, Chaco, Santiago del Estero and parts of other neighbouring provinces) and Yungas reached 1.5% and 0.5% respectively (Ministerio de Ambiente y Desarrollo Sustentable, 2016[17]). Nearly 28% and 16% of the 1960 forested area in the Chaco and Yungas regions has been lost, respectively (Viglizzo et al., 2011[4]).

The main driver of deforestation rates in Argentina is agriculture. From 1990 to 2005 nearly 90% of forest loss was attributed to agriculture activities: half due to pasture and half due to commercial cropland (De Sy et al., 2015[16]; Fehlenberg et al., 2017[18]). Conversion from forest to cropland and grassland contributed to 35% of total GHG emissions from agriculture activities in 2014, including LULUCF emissions.

Figure 7.4. Annual deforestation rates in Argentina are high relative to the world and the Latin American region
picture

Source: WDI, World Bank (WDI, 2018[19]).

 StatLink https://doi.org/10.1787/888933908229

Biodiversity has been affected by both the conversion of grassland and forest into cropland and the intensification of agriculture. Globally, pesticide use has contributed to reducing populations of birds, insects, amphibians and aquatic and soil communities, either through direct exposure or reduction in food and habitat availability (OECD, 2019 forthcoming[14]). The diversity of rodents, plants and crop-associated insects and, particularly, of birds and carnivores, in the Pampas region has been negatively affected by the expansion and intensification of agriculture (Medan et al., 2011[20]). Bird species richness and abundance has been found to be negatively correlated with crop density and positively correlated with grassland area (Cerezo, Conde and Poggio, 2011[21]; Medan et al., 2011[20]). Increased pesticide and fertiliser use and overgrazing associated to the intensification of agriculture have impacted small mammal populations and crop-associated insects (Medan et al., 2011[20]). Soil quality and erosion benefited from NT but monocropping is a risk

Soil characteristics affect a multiplicity of ecosystem services and outcomes: provision of food, raw materials, fresh water and water retention; carbon sequestration, water purification, climate and water regulation, erosion and flood control; nutrient cycling, soil formation and provision of habitat (Adhikari and Hartemink, 2016[22]; Wingeyer et al., 2015[8]).

Most of Argentina’s agriculture is located in areas where mollisol soils dominate (Chaco-Pampas regions); such soil types are among the most fertile on Earth and are characterised by a dark topsoil rich with organic matter. Soil management and agriculture practices impact the quality and fertility of soils. Wingeyer et al. (2015[8]) assessed the extent to which the expansion of cropland in South America has impacted soil quality and concluded that three important indicators of soil quality – soil organic matter (SOM) content, aggregate stability and bulk density3 – had 64%, 48% and 116% of the pristine values in areas with 10-20 years of continuous agriculture in Argentina (Wingeyer et al., 2015[8]). Organic carbon content in the Pampas region ranges between 5.5 and 38 g/kg and registered an average reduction of 30-52% compared to pristine soils (Sainz Rozas, Echeverria and Angelini, 2011[23]). PH levels ranged between 6 and 7.5, with an average of 6.3, which, according to the same authors, did not present risks for agriculture production but may lead to acidification problems in some areas.

Losses of organic matter in soils under cropping systems also yield reductions in other nutrients such as N, P and S. While the provision of nutrients from fertilisation is growing (Figure 7.2), P deficits in cropland could limit agriculture productivity in the future (Wingeyer et al., 2015[8]). Concerns regarding losses of organic matter despite widespread adoption of no-till practices are on the rise, mainly due to monocropping systems with low rotation (Nocelli, 2018[24]; Casas, 2018[9]). Since 2010 the ratio of grasses to leguminous crops cultivated area has increased from 30% to 46%, increasing crop diversity, which can help to restore carbon content in soils and reduce erosion risks (Vázquez Amábile, Feiguin and Fritz, 2018[10]).

Organic matter is also an important determinant of soil erodibility. High erosion rates can harm crop yields and undermine ecosystem services related to soil quality. Recent estimates indicate that 26% of the country is affected by high to extremely high erosion rates by water, with estimated soil losses of 50-200 tn/ha/year for high erosion areas and greater than 200 tn/ha/year for areas with extremely high erosion rates (Gaitán et al., 2017[25]). Erosion rates are higher than in 1990 mainly due to monocropping, deforestation and overgrazing (Casas, 2018[9]). Land with high erosion rates is located in steep and arid areas near the Cordillera and in the Patagonia region of the south. While in most of the central and the northeast regions, where agriculture activity concentrates, erosion rates are low (below 10 tn/ha/yr), steep regions within that area tend to be affected by moderate erosion levels (between 10 to 50 tn/ha/yr). Erosion rates in agriculture land is slightly below worldwide rates, which are estimated to be 12.7 tn/ha/yr (Borrelli et al., 2017[26]). No-till practices in Argentina have contributed to the country having the largest decrease in erosion rates worldwide: it is estimated that they have decreased 33% due to no-till (Borrelli et al., 2017[26]).

7.3. Potentially mild impacts of climate change on agriculture, but higher frequency of extreme events

Most climate models project increases in temperature due to climate change in all the Argentinian territory; more intense warming is expected in the north and west areas reaching increases up to 3.5ºC and higher in the summer (Magrin et al., 2014[27]; Barros et al., 2015[28]). Precipitation is projected to increase in northern, central and eastern areas (between 17% and 20%) and decrease in the Patagonia and Mendoza regions (between -10% and -20%) (Magrin et al., 2014[27]; Barros et al., 2015[28]; Nuñez, 2018[29]). Temperature increases are projected to be in the 0.5-1.0ºC range.

In the past, increases in temperature and precipitation, have improved yields in Argentina. While there are several uncertainties associated to projecting the impacts of climate change on agricultural production, the potential negative impacts of persistent and more pronounced climate change on yields may on average be mild, particularly in rain-fed areas of high productivity located in the central and eastern parts of the country. Higher CO2 concentrations in the atmosphere, which tend to improve photosynthesis and increase yields (Barros et al., 2015[28]; Murgida et al., 2014[30]), could more than compensate the potentially negative effects of hotter temperatures, particularly in the Pampas (Magrin et al., 2014[27]; Nuñez, 2018[29]). Regarding specific crops, climate change scenarios will likely favour soybeans over wheat and maize. Areas such as Mendoza which rely on irrigation for agriculture production (mainly viticulture) will be negatively affected by reduced water availability from lower snow in the mountains, the main source of river flow (Schwank et al., 2014[31]).

Notwithstanding potential average effects of temperature and precipitation, a source of risk for agricultural production may be increased interannual and decadal climate variability. Most common extreme weather events in Argentina include riverine floods, storms, wildfires, cold temperatures and storm surges (Nagy et al., 2018[32]). Even though, relative to other countries, droughts are not a common phenomenon in Argentina, their effects on agricultural production can be high as the 2018 drought has proven4. The frequency of floods are likely to maintain their observed growing trends, particularly in the south of La Plata basin (Barros, Garavaglia and Doyle, 2013[33]). Extreme high temperatures are also likely to increase (Barros et al., 2015[28]), which may exacerbate the frequency of extreme weather events.

7.4. Agri-environmental policies

This section presents a review of the main policies addressing the environmental impacts of agriculture, principally addressing whether they are aligned with the main environmental challenges identified through the agri-environmental indicators and whether they reflect key characteristics for being cost-effective.

Argentina has made progress in reducing some of the environmental pressures from agriculture, mainly those related to soil erosion and maintaining the soil quality. However, many pastoral and semi-pastoral production systems have been replaced by intensive soybean production systems dominated by double-cropping GM technological packages, and feedlots have an increasing role in cattle production. This transformation of the agriculture sector to intensive soybean production systems poses environmental challenges. Particular, increased deforestation and high and rising pesticide use per unit of land seem to be the major challenges, followed by the loss of organic matter and P content in soils when NT practices are not accompanied by good rotation practices.

The main agri-environmental policies in Argentina consist of incentives for good agriculture practices, and measures for natural resource conservation and protecting water quality (Figure 7.5). Since 1989, the province of Entre Rios has provided partial property tax exemptions for farmers undertaking soil conservation practices. More recently, in 2017, the province of Cordoba initiated a programme providing per hectare payments conditional on undertaking specific good agricultural practices in areas such as rotation, pasture, soils and fertilisation.

The National Plan of Agriculture Soils (Plan Nacional de Suelos Agropecuarios) was launched in 2018 in order to promote the conservation, sustainable management and restoration of soils to maximise their productivity and provision of ecosystem services in the context of climate change. The plan relies on six components: 1) the System of Soil Information of Argentina, based on the National Observatory of Agriculture Soils; 2) tools for promoting the sustainable management of soils; 3) training in soils management and knowledge; 4) strengthening of institutions and co-operation; 5) soil policy platform; and 6) support to research.

Other policies related to agriculture may affect the environment. The fertiliser VAT exemptions are unlikely to have significant impacts since they are not discriminated by fertiliser type, and they only affect farmers that are not able to deduct VAT, who are typically small producers. Bans on extremely and highly hazardous pesticides are also in place. Finally, commodity export taxes affect farmers’ output prices and may affect the environment. To better assess the different policies, Table 7.3 displays each policy (in each row) and some of their key characteristics (in columns) 5.

Because Argentina is a federal republic, provinces have a high degree of autonomy to define policies and regulations. In many cases, regulations only apply in certain provinces, specifically those that tend to promote good agriculture practices and soil conservation. Most regulations are voluntary in nature and do not discriminate in terms of management unit (i.e. farmers are paid the same rates independently of the size of the operation). Regulations such as protected areas, protected wetlands and conservation of native forests rely on budgetary transfers for the management of these areas and or specific programmes with relevant communities and thus they cover not only farmers but other stakeholders.

The polluter pays principle (PPP) states that “the polluter should be held responsible for environmental damage caused and bear the expenses of carrying out pollution prevention measures or paying for damaging the state of the environment where the consumptive or productive activities causing the environmental damage are not covered by property rights” (OECD, 2001[34]). Advancing towards the application of the PPP requires strengthening the responsibility of farmers in reducing negative environmental externalities from agriculture.

Three main policy characteristics define the cost effectiveness of agri-environmental policies: environmental targeting, flexibility and budgetary/administrative costs (OECD, 2010[35]). Environmental targeting refers to the degree to which policy incentives are higher for those farmers whose actions are more likely to reduce environmental harm. A second fundamental characteristic that defines the effectiveness of any policy is the possibility to enforce it via monitoring and imposing sanctions to violators, as well as the recurrent assessment of the effectiveness of the regulations. Flexibility is related to the freedom of farmers to choose among different options to achieve a desired environmental outcome. A formal assessment of effectiveness is also desirable. Finally, budgetary and administrative costs define the monetary burden imposed on taxpayers to achieve certain goals.

Figure 7.6 summarises some of the relevant characteristics that influence the cost-effectiveness of policies in Argentina. Most regulations stipulate monitoring and sanctions guidelines.6 There is room for improving policies by making them environmentally targeted, evaluating their effectiveness, and streamlining the costs that are involved to maintain the policy in place and ensure compliance. Regarding flexibility, the most flexible policies are those related to protected areas, wetland protected areas and conservation of native forests: all of these allow plenty of flexibility to local jurisdictions and private actors to ensure protection and conservation of natural assets.

Figure 7.5. Agri-environmental policies in Argentina
picture

Source: Author’s own work based on a country questionnaire.

Table 7.3. Characteristics of main agri-environmental policies in Argentina

Main characteristics

Differentiation

Effectiveness

Policy target/

Characteristics

Geographic scope

Mandatory/

Voluntary

Type of Support

Partial or total compensation of incurred costs

Differentiated by size of the management unit

Differentiated by geographic zone

Differen-tiated by crop

Environ-mental targeting

Monito-ring

Fines

Effective-ness assess-ment

Budgetary cost assessment

Soil conservation practices

Provincial: Entre Ríos

Voluntary

Property tax exemption

Yes

No

No

No

Yes

Yes

Yes

No

No

Good agricultural practices

Provincial: Cordoba

Voluntary

Payments based on current area, production required

Yes

No

No

No

No

Yes

Yes

No

Yes

Organic certification

National

Voluntary

n.a.

No

No

No

No

Yes

Yes

Yes

Yes

No

Good practices in the application of pesticides

National

Mandatory

n.a.

No

No

No

Fruits and vegetables

No

Yes

Yes

No

No

Standards of nutrient discharges to water bodies

Provincial

Mandatory

n.a.

No

No

No

n.a.

Yes

Yes

Yes

No

No

Protected areas

National/ Provincial/

Municipal

Voluntary: provinces need to cede the land

Budgetary

No

No

Yes

n.a.

Yes

Yes

Yes

Yes

Yes

Wetlands protected areas

National

Voluntary

Budgetary

No

No

Yes

n.a.

Yes

Yes

No

Yes

Yes

Conservation of native forests

National

Mandatory

Budgetary

Yes

Yes

Yes

n.a.

Yes

Yes

Yes

Yes

Yes

Other relevant policies

Pesticide bans

National

Mandatory

n.a.

No

No

No

No

No

Yes

Yes

Yes

No

Fertiliser tax exemptions

National

Mandatory

50% of VAT

No

No

No

No

No

Yes

No

Yes

Yes

Commodity export tax

National

Mandatory

Export tax

No

No

No

Soybeans

No

Yes

Yes

n.a.

Yes

n.a.: Not applicable.

Source: Based on a country questionnaire and direct consultation to regulations and laws.

Figure 7.6. There is room for improving current agri-environmental regulations
picture

Source: Author’s own work based on a country questionnaire and direct consultation to regulations and laws.

 StatLink https://doi.org/10.1787/888933908248

Current policies are only partially aligned to the pressing environmental issues identified in previous sections. Deforestation is tackled mainly via the promotion of protected areas, including wetlands, and by the native forest conservation law. Increased pesticide sales per hectare are not particularly targeted by any policy. Increased loss of organic matter and P in soils is partially addressed by the promotion of good agriculture practices, although these are currently limited to certain jurisdictions.

Deforestation driven by the expansion of the agriculture frontier is a primary area of concern given the high deforestation rates experienced in the last decades. According to the mitigation actions submitted by Argentina in their Nationally Determined Contributions (NDC) as part of its commitment to the Paris Agreement to tackle climate change, combating deforestation and reducing emissions in the agriculture sector is a fundamental pillar, contributing to more than 20% of emissions reductions in the NDC (Ministerio de Ambiente y Desarrollo Sustentable, 2016[17]). The key actions in those sectors related to curbing deforestation include: to develop conservation and use plans for forested areas to improve carbon sequestration in the Chaco and Selva Misionera areas, and increase afforestation. Other actions are related to promote crop rotation in order to increase cereal cultivated area and reducing soybeans cultivated area.

NDC from forestry are articulated around the Native Forest Law (Ley 26.331), which was enacted in 2007, and forest plantations. The Law specifies that provinces need to define forested land areas according to 3 categories: 1) red areas, which should be preserved due to their high ecological value; 2) yellow areas, which possess medium ecological value but can be subject to sustainable management; and 3) green areas, which have low ecological value and could be partially or totally transformed. The Law has several other dimensions: it defines a National Program for Native Forest Protection, whose purpose is to promote the sustainable management of yellow and green areas, taking into account local communities; it establishes that any forest clearance in green areas should be subjected to an environmental impact evaluation; it defines the sanctions that apply for illegal logging; and it creates the National Fund for Forest Enrichment and Conservation, which is intended to compensate those jurisdictions that conserve forests. According to the Law, at least 0.3% of the national budget and 2% of the revenue from export taxes to agriculture and forestry products should be allocated to The National Fund for Forest Enrichment and Conservation.

A closer evaluation and analysis of the effectiveness of the conservation of Native Forest Law (Ley 26.331), which was enacted in 2007, is necessary. A thorough government assessment of the Law (Auditoría General de la Nación, 2017[36]) identified several limitations regarding its implementation:

  1. 1. In practice, enforcement of the legislation is weak.

  2. 2. The budget assigned for conservation of native forests is well below the minimum limits established by the law.

  3. 3. The establishment of management plans in sensitive conservation areas is delayed, with a large majority of them lacking a management plan.

  4. 4. Environmental targeting in the designation of conservation areas is poor.

  5. 5. Public consultation for designing conservation areas is missing in most of them.

Finally, most agricultural policy can have impacts on the environment and any potential change in such regulations should consider these and the necessary legislation and measures to ensure that the polluter bears the cost of the negative environmental impacts (internalise externalities). For instance, export taxes on the main agricultural commodities including soybeans provide less incentive to expand agricultural activities, but they were removed or significantly reduced in 2015 and 2016. Such changes reduce market distortions and in the short term may stimulate crop diversification by eliminating taxes except for soybean, but they may also provide incentives to deforest and expand the agriculture frontier. Moreover, since part of the budget for the National Fund for Forest Enrichment comes from export taxes, once those are eliminated, the financial resources for the Fund could shrink. It is also becoming increasingly urgent to ensure that more targeted measures and regulations are effective to prevent potential damages to natural assets. This is particularly the case of the Native Forest Law and the rising use of pesticides. The promotion of crop rotation, including pasture rotation, is needed as a way to increase organic matter content in soils and ensuring the long term sustainability of the agriculture sector in Argentina. The incentives for a set of good practices could be strengthened, stressing rotation and P fertilisation but making sure runoff is avoided to prevent contamination of waterways.

There have been some recent agri-environmental policy developments in Argentina. Law 27.279, on integral management of empty plastic containers of agrochemicals, was approved in October 2016 and regulated in February 2018, extending liability regime for agrochemicals product registrants, establishing minimum requirements for the empty container management systems to be approved by the Provinces, and creating a national system for traceability of the containers. The Joint Resolution of the Ministries of Agribusiness and Environment and Sustainable Development of February 2018 established a national policy on good practices in the application of phyto-sanitary products. Finally, the Joint Resolution of the Ministry of Agribusiness and the Superintendence of Insurance of the Nation (SSN) 1/2018 creates the Environmental and Insurance Sustainability Program, a voluntary programme for insurance companies to contribute of 1% on automobiles policies to a trust administered by the SSN and designed to promote reforestation.

7.5. Policy assessment and recommendations

Argentina’s agriculture sector has transformed in recent years at an accelerated pace. Many pastoral and semi-pastoral production systems have been replaced by intensive soybean production systems. While water use, nutrient balances and energy use are still relatively low compared to OECD countries, the principal concerns about the sustainability of the dominant agriculture system are related to high deforestation rates and relative high rates of pesticide use in cropland. Other potential risks are associated to loss of organic matter and insufficient P fertiliser applications to compensate the P uptake from crops. The application of the “Polluter pays principle” requires strengthening the responsibility of farmers in reducing negative agri-environmental externalities.

Deforestation rates are higher than regional and global figures. In a 25-year period, from 1990 to 2015, Argentina lost 22% of its forest mainly due to agriculture. Moreover, in the last 15 years, deforestation rates increased, contrary to regional and global trends. In spite of improvements and reductions in deforestation rates in recent years, they are still above regional and global averages. As a result, greenhouse gas emissions and the loss of biodiversity have increased, but water-related ecosystem services have also been on the rise.

While no-till practices are widespread and have reduced erosion rates and helped to maintain organic matter content in soils, monocropping and low rotation practices reduce organic matter content. Additionally, pesticide use is considerably larger than in OECD countries and there are some risks associated to the use of Atrazine due to its persistence and capacity to contaminate drinking-water sources.

The main agri-environmental policies in Argentina consist of 1) those stimulating good agriculture practices, 2) natural resource conservation and 3) protecting water quality. Current policies are hardly aligned to pressing issues but, given the current policy changes to reduce the tax burden of the main exporting commodities, it is recommended to strengthen the set of environmentally targeted policies and legislation which will also contribute to advancing the polluter-pays-principle. In particular:

  • First, undertake an in-depth independent evaluation of the Native Forest Law to analyse its effectiveness in stemming deforestation. In particular, evaluate: the capacity of enforcement of the law in different provincial jurisdictions; the environmental targeting methods and procedures to identify conservation priorities; and the strength of the economic incentives to deforest, including sanctions for illegal logging, under the evolving agricultural technological package. The evaluation should include a realistic estimation of the budgetary allocations needed for compensation, implementation and potential decoupling of the allocations from the export tax. An independent evaluation of forest categorisations is needed to make sure highly valuable ecosystems are fully preserved.

  • Second, establish a monitoring programme for pesticide residues in waterways, food and air. It is fundamental to define hotspots and areas which require immediate public intervention. Programmes to ensure the consistent application of best practices in the use of pesticides, such as Integrated Pest Management, via extension services should particularly focus on hotspots areas. A recent joint resolution (1/2018) of the Ministry of Agroindustry and the Ministry of Environment and Sustainable Development, which mandates the promotion of good practices in the application of pesticides, is a good first step in this direction. Other measures such as taxes may be less effective in the short term, given that in general the price elasticity of pesticides is low. Some OECD countries have adopted pesticide taxes to complement command-and-control measures such as the ones proposed, but their effectiveness has proven to be in general limited, and measures targeted to properly identify hotspots are preferable.

  • Third, strengthen the use of best environmental practices and information regarding their adoption. In this respect Argentina is well positioned in institutional terms and the Government can work in partnership with both private associations of farmers such as APRESID or AACREA and with the extension services of INTA. Advisory and information programmes run in collaboration between farmers associations and government agencies can be crucial to foster action and promote pro-environmental practices. Examples of such programmes can be found in Denmark, where farmers work jointly with government agencies to disseminate nutrient accounts and best practices to reduce nutrient loads (OECD, 2019 forthcoming[14]). Argentina has advanced on this regard by establishing the Network on Best Agriculture Practices (BAP), which gathers a broad range of private and public actors. A way forward is for the Network to strengthen the information on adoption rates and impacts of BAP engaging in a learning process. This may be particularly important to maintain soil productivity, prevent high erosion rates and contribute to the maintenance of carbon in soils.

To be able to attain the main environmental goals in the agriculture sector it is also recommended to:

  1. 1. Improve the environmental targeting of current policies.

  2. 2. Promote the adoption and implementation of good practices policies in jurisdictions where agriculture is prevalent and expanding.

  3. 3. Improve the enforcement of policies, including those currently in practice, defining goals in terms of inspections and sanctioning non-compliance.

  4. 4. Assess and evaluate the effectiveness, budgetary and administrative costs of the different policies.

  5. 5. Assess changes in other agriculture policies that can have direct impacts on the environment to identify if any potential negative environmental impacts arising from them can be mitigated or diminished by new or improved policies.

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[1] Zak, M. et al. (2008), “What drives accelerated land cover change in Central Argentina? Synergistic consequences of climatic, socioeconomic, and technological factors”, Environmental Management, Vol. 42/2, pp. 181–189, http://dx.doi.org/10.1007/s00267-008-9101-y.

Notes

← 1. As of 2012, Endosulfan has been banned in Argentina and several countries in the world due to its high toxicity. More recent studies have found few traces of pesticides and nitrates residues in groundwater (Vázquez Amábile, 2017[15]).

← 2. Since OECD data on pesticides indicates sales and data for Argentina and Brazil indicate use, if all were measured in terms of use, the gap between Brazil, Argentina and the OECD would be even higher as pesticides sales may over-represent use due to stocking.

← 3. Soil organic matter consists of plant and animal residues, soil organisms, and other organic substances. Aggregate stability refers to the capacity of soil particles to resist external forces and keep its porosity. Bulk density is the weight of soil in a given volume; the higher the density the more difficult it is for roots to grow.

← 4. The 2018 drought is estimated to have reduced GDP by 0.9% due to a reduction of 22% in maize production and 33% in soybeans (Tejeda et al., 2018[37]).

← 5. The National Plan of Agriculture Soils was not included given that there are no specific policies yet derived from such Plan.

← 6. Notice this assessment is based on what the regulation stipulates and not on what happens in reality.

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