**2. Primary production**

At the beginning of the seventies, the soybean cultivated area reached 30,470 hectares with a total output of 26,800 tons. The low importance of this crop may be explained by the lack of attractive markets, the low international prices and the national trade policy, which strongly restricted the exportation of grain and byproducts (Civitaresi and Granato, 2003).

The expansion of the cultivated area and yields started during the seventies. The cultivated area increased 6,792 % between the 1969/1970 and the 1979/1980 seasons and 143 % between 1979/1980 and 1989/1990 whereas the production increased 12,959 % and 206 % considering the same periods. Likewise, the soybean yields increased 32.7 % between 1970/1971 (1,024 kg/hectare) and 1989/1990 (2,157 kg/ha). This outstanding growth was due, among other endogenous causes, to technological changes and its fast adoption shown in the improvement of agronomic management, agricultural mechanization and agrochemicals application (Civitaresi and Granato, 2003). In addition, the double crop wheat-soybean3 began to develop.

Among the exogenous causes that explain the growth in this twenty years (1970/1990), highlights the increase of international prices in the mid seventies, reduction of export duties, elimination of exportation ban (1978) and modification of the policy carried out by the European Economic Community (EEC) nowadays European Union (EU). In the 70s, the EEC negotiated the entry of soybean and its byproducts with zero tariff according to a restructural procedure of its Common Agricultural Policy in the framework of the Dillon Round of the General Agreement Tariff and Trade (GATT) (1960/1961). The strong expansion of its milk production and the subsequent need to feed its cattle urged the strong demand of vegetable proteins. The EEC tried –unsuccessfully- to cover its needs with its own cereal production by restricting the access to imported cereals (as the wheat bran from Argentina), but it could not restrict the entry of soybean, which was protected by the commercial concession in the framework of the GATT4 (Albin and Paz, 2003).

In the last twenty years, the process of expansion of the soybean cultivated area has continued uninterrupted. The cultivated area increased 72.3 % between 1989/1990 and 1999/00 and 108.7 % between 1999/00 and the last season 2009/2010. In addition, the soybean production increased 88.2 % and 162 % for the same periods.

In Figure 1 it can be seen the expansion of the cultivated area and of the soybean production5 as well as the leap in both indicators since the year 1996.

<sup>2</sup> It will be applied the definition by Civitaresi and Granato (2003) which classifies the factors into exogenous: that depend on macro economic policies and on international commerce, and endogenous: that derive from the strategies carried out by the protagonists of the different links of the chain. 3 The short cycle wheat allows the sowing of wheat-soybean in the same agricultural cycle and in the

same area

<sup>4</sup> In the eighties, it tried to "under strengthen" the soybean and its derivatives: this situation led to serious confrontations with the U.S.A.

<sup>5</sup> The decrease in production in 2008 and part of 2009 was due mainly to a drought and partly to the conflict between the agricultural sector and the Government. The conflict was originated by the implementation of "mobile export duties" by the Economy Minister (the duties varied according to the

and exporta sectors, since the mid seventies up to the present time, with special emphasis on the last thirty years. The aim is to outline the probable future context that the direct and

At the beginning of the seventies, the soybean cultivated area reached 30,470 hectares with a total output of 26,800 tons. The low importance of this crop may be explained by the lack of attractive markets, the low international prices and the national trade policy, which strongly

The expansion of the cultivated area and yields started during the seventies. The cultivated area increased 6,792 % between the 1969/1970 and the 1979/1980 seasons and 143 % between 1979/1980 and 1989/1990 whereas the production increased 12,959 % and 206 % considering the same periods. Likewise, the soybean yields increased 32.7 % between 1970/1971 (1,024 kg/hectare) and 1989/1990 (2,157 kg/ha). This outstanding growth was due, among other endogenous causes, to technological changes and its fast adoption shown in the improvement of agronomic management, agricultural mechanization and agrochemicals application (Civitaresi and Granato, 2003). In addition, the double crop

Among the exogenous causes that explain the growth in this twenty years (1970/1990), highlights the increase of international prices in the mid seventies, reduction of export duties, elimination of exportation ban (1978) and modification of the policy carried out by the European Economic Community (EEC) nowadays European Union (EU). In the 70s, the EEC negotiated the entry of soybean and its byproducts with zero tariff according to a restructural procedure of its Common Agricultural Policy in the framework of the Dillon Round of the General Agreement Tariff and Trade (GATT) (1960/1961). The strong expansion of its milk production and the subsequent need to feed its cattle urged the strong demand of vegetable proteins. The EEC tried –unsuccessfully- to cover its needs with its own cereal production by restricting the access to imported cereals (as the wheat bran from Argentina), but it could not restrict the entry of soybean, which was protected by the

In the last twenty years, the process of expansion of the soybean cultivated area has continued uninterrupted. The cultivated area increased 72.3 % between 1989/1990 and 1999/00 and 108.7 % between 1999/00 and the last season 2009/2010. In addition, the

In Figure 1 it can be seen the expansion of the cultivated area and of the soybean

2 It will be applied the definition by Civitaresi and Granato (2003) which classifies the factors into exogenous: that depend on macro economic policies and on international commerce, and endogenous: that derive from the strategies carried out by the protagonists of the different links of the chain. 3 The short cycle wheat allows the sowing of wheat-soybean in the same agricultural cycle and in the

4 In the eighties, it tried to "under strengthen" the soybean and its derivatives: this situation led to

5 The decrease in production in 2008 and part of 2009 was due mainly to a drought and partly to the conflict between the agricultural sector and the Government. The conflict was originated by the implementation of "mobile export duties" by the Economy Minister (the duties varied according to the

restricted the exportation of grain and byproducts (Civitaresi and Granato, 2003).

commercial concession in the framework of the GATT4 (Albin and Paz, 2003).

soybean production increased 88.2 % and 162 % for the same periods.

production5 as well as the leap in both indicators since the year 1996.

indirect agents connected to the soybean complex will face.

**2. Primary production** 

wheat-soybean3 began to develop.

same area

serious confrontations with the U.S.A.

Fig. 1. Argentina soybean. Production and Cultivated Area. Years 1885/86 to 2009/2010.

Specifically in the nineties, the following endogenous factors can be featured as causes of the expansion: the genetic modification in several crops –among them the events in the soybean seed and consequently the start of the transgenic technology spreading at an international level-, and the intensification in the use of machinery and supplies, mainly the "glyphosate"6 herbicide. In addition, a fundamental change in the plowing system took place: no-till cropping, which deserves a special paragraph.

"No-till cropping started to gain importance in the Argentine agriculture in the late eighties since in many of the most important areas of the *Pampeana* region, the cumulative effects of the soil erosion -resulting from the "agricultural cultural process" on the basis of traditional plowing practices– began to show negative operative results in the exploitation. This effect on yields, and through them, on the economic feasibility of agriculture, together with the fact that, as a result from the deregulation and opening processes of the economy, the availability of appropriate farming machinery increased, plus the reduction in direct costs (as a result of the elimination of the plowing tasks), provided an outstanding basis for the spreading of no-till cropping, which in turn had the objective of recovering, at least some of the lost productivity" (Trigo and Cap, 2006).

Fuethermore, the synergy between glyphosate tolerant soybean tolerant (RR-soybean) and the non-till system –which shortens the required time between the wheat harvest and the soybean planting- makes possible the successful use of short cycle soybean varieties as second crop and allows a double-cropping wheat-soybeans in zones where before was not possible from an agronomic point of view. According to data provided by the Argentine No Till Farmers Association (AAPRESID), at the beginning of the nineties, the area of soybean

variations in the international price of the soybean). This duties were enforced from March 2008 to July 2008 (they were derogated by a legislative decision).

<sup>6</sup> In the 2009/2010 season, more than 200 millon liters of glyphosate were applied in all the soybean sown area in Argentina, whereas in 1996 13 million liters were used

under no-till cropping system reached 6%, whereas in the 2001/02 season it was 74%, in 2006/07 it accounted to 85% and in 2009/10 it reached 88 %.

Analyzing the exogenous factors that fostered the development of soybean in the nineties, highlights the changes in the economic policy: tariff reduction for machinery and inputs imports, reduction and/or elimination of export duties for products of the soybean chain, investments in ports, deregulation of markets (elimination of Meat and Grain Boards) and privatizations (ports, railways) which lessen the cost of production and favor the acquisition of technology.

At an international level, relevant facts such as average international prices lower than in the previous decade , the increase of commercial barriers in the rest of the world (in spite of the final Agreement of the GATT´s Uruguay Round) have not been auspicious for the soybean chain. In this respect, the only favorable fact was the increase in the demand of grain by the Brazilian oil industry, in the frame of the MERCOSUR (Civitaresi and Granato, 2003).

Going through the last decade, the increase in the soybean cultivated area7 is due both to the incorporation of new lands and to the substitution of other crops. The agricultural expansion towards the north of Argentina8 is shown by a 70 % increase of the cultivated area between the last two National Agricultural Census (CNA 1988 and CNA 20029), although this is a marginal area for this crop. 66 % of the lands transferred to agriculture in the north of Argentina was occupied by soybean (Giancola *et al*., 2010).

According to Shvarzer and Tavosnanska (2007), the increase in the production for the last ten years might have several causes. One of them is the increase in international prices because of the growing world demand for soyean oil and meal. Another cause is the technological change, which involved a reduction of related costs. Likewise, between the years 2000 and 2010 it is worth mentioning: the intensification of the technological package, scale incrementes in the productive core, the suitability of the soil, the existing road infrastructure and the increase of the rainfall (Giancola *et al.*, 2010).

Complementing the previous considerations, among other fundamental causes of the soybean expansion is worth mentioning: higher financial income, lower complexity in the operation and lower risk than other crops, and farmers' knowhow, together with the use of their own seed (INTA, 2009).

As related to the topic of seeds and specially about the use of the varieties of genetically modified soybean10 (GM), the data provided by ARGENBIO (a non governmental organization created to spread information about biotechnology) shows that in the 1996/1997 season, the area occupied with GM soybean was 6% and quickly reached 94% in 2001/2002 to cover 98% in 2004/2005.

<sup>7</sup> At present (2009/10 season) soybean occupies 18,343,272 hectares with a production of 52,677,371 tons (CIARA, 2011).

<sup>8</sup> The traditional region for the production of soybean is called "pampeana" and it is made up by the provinces of Córdoba, Buenos Aires, Santa Fe, Entre Ríos and La Pampa.

<sup>9</sup> At a primary level, 75% of the production comes from 40% of the productive units (100,000 units). The average size of the units is 170 hectares.

<sup>10</sup> The gene resistant to the glyphosate herbicide was initially owned by Monsanto in the United States, which granted a license to Asgrow, then this company was bought by Nidera, which introduced it in Argentina. Afterwards, when Monsanto patented the product abroad, it had already been freed by third parties to be sold in Argentina (Quaim and Traxler, 2002). This situation started a controversy between Monsanto and the Argentine government, in which the company has claimed in order to obtain royalties.

under no-till cropping system reached 6%, whereas in the 2001/02 season it was 74%, in

Analyzing the exogenous factors that fostered the development of soybean in the nineties, highlights the changes in the economic policy: tariff reduction for machinery and inputs imports, reduction and/or elimination of export duties for products of the soybean chain, investments in ports, deregulation of markets (elimination of Meat and Grain Boards) and privatizations (ports, railways) which lessen the cost of production and favor the acquisition

At an international level, relevant facts such as average international prices lower than in the previous decade , the increase of commercial barriers in the rest of the world (in spite of the final Agreement of the GATT´s Uruguay Round) have not been auspicious for the soybean chain. In this respect, the only favorable fact was the increase in the demand of grain by the Brazilian oil industry, in the frame of the MERCOSUR (Civitaresi and Granato, 2003). Going through the last decade, the increase in the soybean cultivated area7 is due both to the incorporation of new lands and to the substitution of other crops. The agricultural expansion towards the north of Argentina8 is shown by a 70 % increase of the cultivated area between the last two National Agricultural Census (CNA 1988 and CNA 20029), although this is a marginal area for this crop. 66 % of the lands transferred to agriculture in

According to Shvarzer and Tavosnanska (2007), the increase in the production for the last ten years might have several causes. One of them is the increase in international prices because of the growing world demand for soyean oil and meal. Another cause is the technological change, which involved a reduction of related costs. Likewise, between the years 2000 and 2010 it is worth mentioning: the intensification of the technological package, scale incrementes in the productive core, the suitability of the soil, the existing road

Complementing the previous considerations, among other fundamental causes of the soybean expansion is worth mentioning: higher financial income, lower complexity in the operation and lower risk than other crops, and farmers' knowhow, together with the use of

As related to the topic of seeds and specially about the use of the varieties of genetically modified soybean10 (GM), the data provided by ARGENBIO (a non governmental organization created to spread information about biotechnology) shows that in the 1996/1997 season, the area occupied with GM soybean was 6% and quickly reached 94% in

<sup>7</sup> At present (2009/10 season) soybean occupies 18,343,272 hectares with a production of 52,677,371 tons

<sup>9</sup> At a primary level, 75% of the production comes from 40% of the productive units (100,000 units). The

<sup>10</sup> The gene resistant to the glyphosate herbicide was initially owned by Monsanto in the United States, which granted a license to Asgrow, then this company was bought by Nidera, which introduced it in Argentina. Afterwards, when Monsanto patented the product abroad, it had already been freed by third parties to be sold in Argentina (Quaim and Traxler, 2002). This situation started a controversy between Monsanto and the Argentine government, in which the company has claimed in order to obtain

<sup>8</sup> The traditional region for the production of soybean is called "pampeana" and it is made up by the

2006/07 it accounted to 85% and in 2009/10 it reached 88 %.

the north of Argentina was occupied by soybean (Giancola *et al*., 2010).

infrastructure and the increase of the rainfall (Giancola *et al.*, 2010).

provinces of Córdoba, Buenos Aires, Santa Fe, Entre Ríos and La Pampa.

of technology.

their own seed (INTA, 2009).

(CIARA, 2011).

royalties.

2001/2002 to cover 98% in 2004/2005.

average size of the units is 170 hectares.

Even in Argentina, these adoption was faster than others, as for example hybrid corn or wheat with Mexican germplasma. Hybrid corn lasted 18 years to reach 70% of the acceptance that nowadays GM corn holds, and Mexican wheat reached the same percentages of adoption as soybean has nowadays (more than 90% of the market) only after 16 years (López, 2006, as cited in Trigo and Cap, 2006).

Another factor that favored the technological change is related to inputs supply for the soybean crop (Bisang, 2003) which has the following characteristics: a) technological packages: the transgenic seed -RR Soybean- works as a connector of a joint supply that includes: glyphosate, pre-emerging herbicides, insecticides and fertilizers; b) mergers and alliances with companies that offer such technological packages11; c) the packages of supplies offered in service centers include advice about usage techniques.

Finally, soybean share of total cultivated area and grain production of the country allows to visualize the strong soybean expansion in Argentina (Figure 2). According to production data, soybean represented 0.2% of the total cultivated area12 (14 million hectares) in the 1969/1970 season. In the seventies, the soybean cultivated area occupied 3.1 % of the total sown, in the eighties 19%, in the nineties 33% and in the first ten years of the 21st century soybean occupied 54% (more than 18 million hectares) of the total (28 million hectares) implanted.

Regarding the importance of soybean production, and considering the total produced by the five main grains, the participation of soybean was 3.7% on total production in the seventies, 18% in the eighties, 30% in the nineties and 50% in the first ten years of the 21st century (CIARA, 2011). In the 2009/2010 season, the soybean production represented 60% of the total production whereas it was 0.12 % in the 1969/70 season.

Fig. 2. Argentina. Soybean. Production share of the total produced by the five crops and soybean cultivated area shares of total cultivated area. Periods: 1969/70 – 1978/79, 1979/80 – 1979/80 – 1988/89, 1989/90 – 1998/99 and 1999/2000 – 2009/10.

 <sup>11</sup> Monsanto (an company originally dedicated to chemistry, which in the70s expanded to pharmaceutical chemistry) is associated with Dekalb and Cargill; the use of these seeds (specially RR Soybean from Monsanto) requires the application of glyphosate, offered by the same company with the brand "Roundup".

<sup>12</sup> Taking into account the five main crops: wheat, corn, sunflower, sorghum, soybean.

With respect to the geographical location, the soybean cultivated area is situated in 15 (fifteen) productive provinces. However, 85% of the cultivated area is concentrated on the traditional "pampeanas" provinces that generates 88% of the national production (Córdoba, Buenos Aires and Santa Fe provide 78% of the total production) whereas 15% of the remaining area corresponds to Northwester and Northeaster provinces. Map 1 shows the shift of the agricultural frontier13.

Map 1. Evolution of the space distribution of the soybean cultivated area (Brieva, 2006).

Considering the yields, Figure 3 shows that they have increased continuously, from 1.4 tons/ha in the seventies, to 2.6 tons/ha in the first decade of 2000.

Fig. 3. Argentina Soybean. Average Yields (kg/hectare) and growth rate (%). 70, 80, 90 decades and 2000/01 – 2009/10 period.

<sup>13</sup> As mentioned, the shift of the agricultural frontier has generated the substitution of crops (sorghums, corn, cotton among others) and cattle livestock for soybean as well as the spreading of soybean over the native forest.
