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Argentine’s Farmers Want More Railroads

Three dogs and a few sheep are the only signs of life at the train station in Tres Algarrobos, an Argentine town that lies at the heart of one of the world’s most productive farming belts.

Argentina’s once-extensive rail network was largely dismantled during the privatizations of the 1990s. But as agricultural output soars, farmers and grain elevators – who send more than 80 per cent of grains by costly road transport – are calling for investment to revive the railways.

“We’re at a big disadvantage compared with big companies that have their plants on the railway line,” said Sergio Tartara from the Cuenca Cereales grains elevator in Tres Algarrobos. “Rail is much cheaper and transport costs are a big issue for farmers.”

The high price of using trucks to move grains and a patchy network of rural roads are becoming more of a problem in Latin America’s No. 3 economy as harvests grow and farmers plant soybeans in remote regions hundreds of miles from main ports along the Parana River.

Road transport costs about seven U. S. cents per tonne per kilometre in the vast South American country – about twice the cost of rail cargo and four times what it costs to transport grains by boat, according to the Rosario grains exchange.

“Infrastructure for cargo transport is badly outdated … the railways need to play a much bigger role,” said Alfredo Sese, secretary of the transport committee at the grains exchange in Rosario – Argentina’s biggest agricultural port.

For farmers in far-flung provinces such as Salta, a fast-growing soy-producing region more than 1,000 kilometres from Rosario, transport costs eat dramatically into profit margins.

Labour-intensive road transport means farmers’ transportation costs are also more vulnerable to truckers’ pay demands. Most trade unions are calling for wage increases of about 25 per cent this year as inflation accelerates.

“It’s not the same having one driver carry 30 tonnes as having maybe three people carrying 900 tonnes (by train),” said agronomist Jorge Muriel, who works with Sanchez and Co., another grains elevator firm in Tres Algarrobos, which lies in northwestern Buenos Aires province.

BUMPER HARVEST

Farmers in Argentina, a leading global supplier of soy, wheat, corn and beef, are gathering a record soybean crop estimated at 54.5 million tonnes. Corn output is also close to record levels, pushing transport capacity to the limit.

Thousands of trucks have been waiting in line in recent weeks to reach ports in Rosario, home to about 80 per cent of the country’s soy-processing industry and the major port terminals that carry grains to Europe, India and China.

Such scenes are typical at the peak of the corn and soy harvests in Argentina, where 84 per cent of grains are transported by road.

Another 14.5 per cent is shifted by train and just 1.5 per cent by boat, according to a government report.

In neighbouring Brazil, another leading global exporter of farm goods, road transport accounts for about 67 per cent with rail and ships accounting for 28 per cent and five per cent, respectively.

Road transport is even less important for grains transport in the United States, where trucks are used to shift just seven per cent of the harvest. Most U. S. grains are transported by waterway.

INVESTMENT

In Tres Algarrobos, residents are preparing to mark the 100th anniversary of the first train’s arrival to the town even though the only reminder of the railway age is the deserted station building and overgrown tracks.

The town lies 500 kilometres (310 miles) west of the capital Buenos Aires along Route 226, which is dotted with potholes despite the provincial government’s pledges to repair it.

Lines of heavy trucks travelling hundreds of kilometres to port also make the country’s roads hazardous.

The government of President Cristina Fernandez recently launched a project to increase the depth of the Parana River, the country’s main cargo waterway, which would allow bigger, more heavily loaded boats to use it.

Officials have also pledged investment to improve cargo services on the Belgrano Cargas railway, which links Rosario to key soy-growing areas in the north such as Chaco, Salta and Santiago del Estero.

A rail renaissance cannot come soon enough for farmers, rural residents and most of all station master Abel Mosca, who has kept his job even though no cargo or passenger trains have stopped at Tres Algarrobos since 1999.

“At the moment, the tracks are unusable, but they can be fixed with political will,” he said. “I’m hopeful that sooner or later the service will be reopened.”

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