Argentina: Due to the paper crisis, some producers will lose 100% of their investment.

In order to analyze the current situation of the sector, José Linares, vice president of the National Federation of Potato Producers (FENAPP), spoke about the issue.

“We’re actually coming off a very difficult year, both from a climate and supply perspective,” explained José Linares. He then stated that the drop in export contracts worsened the situation: “This has caused factories to cancel some contracts, which ultimately shifted to the domestic market, and this has aggravated the supply crisis we have today.”

Unfair competition

He also pointed out the asymmetry compared to international competitors: "We can’t compete with countries that subsidize activities we carry out at different costs. This is the problem." He gave an example: "Products that come from China cost between 70 and 100% more in this country; some inputs, when the country is neighboring, cost half as much. So it’s impossible to work in this context."

Along the same lines, Linares argued that internal taxes are added to this: "If gross income is applied to each link in the chain, it’s impossible to think that we’ll be similar to other countries that don’t have these taxes."

How subsidies affect potato production

Another factor, he explained, is the influx of subsidized potatoes into the region: "They enter at a lower dollar value than we do because they subsidize. That makes the dollar values ​​they manage unattainable for us, but not because we aren’t better producers than they are."

On the other hand, the interviewee commented that the economic situation is alarming: "In the first half of the year, we lost 50% of our investment. Right now, in some cases, we’re going to lose 100% of our investment because there are crops in the province of Buenos Aires that won’t be harvested."

This, he asserted, will have serious consequences: "It will cause a major disruption to the activity and the sector, making it very difficult to maintain the acreage being planted." However, he ruled out immediate shortages: "That’s not foreseeable in the short term. We believe that, with our efforts, we will achieve some improvement in this situation that will allow us to work on supplying the country."