China delivers opportunity and controversy for Argentina’s pork sector

Despite not figuring among the world’s main pig breeders, opportunity is knocking for Argentina to boost the sector’s growth with a view to exporting to China.

But an agreement between the two countries is sparking controversy and heavy criticism from environmental activists.

A memorandum of understanding between local breeders and the Asian giant, whose signature is expected in little over a month, is to regulate the installation of mega-farms for pigs in Argentina for export to China.

From around 25,000 tons of pork exports last year, Argentina now proposes to shoot up its annual sales to 300,000 tons by the time the project is on full stream.

But even ahead of that, Argentina’s pork exports have taken off – in the first seven months of this year they were 22,407 tons, 66 percent more than in the same period in 2019, according to the Agriculture Ministry.

"We’re not doing anything extraordinary which Argentina cannot do. Chile exports 250,000 tons of pork and Brazil 700,000 tons," the Foreign Ministry’s International Economic Relations Secretary Jorge Neme told AFP, weighing up the scale of the project.

With the target of raising exports from some US$65 billion to US$100 billion at a time of slumping international reserves, an alliance with China is no trifling matter for Argentina.

Health and pandemic

China, the only country whose economy has not shrunk amid the Covid-19 pandemic, is currently the leading importer of Argentine products, displacing Brazil, historically the nation’s top trade partner.

"The kind of product exported by Argentina to China, basically agricultural, is the most resilient [in the context of the pandemic]. That’s why the exports are growing to that market, as they are also are from Brazil and other Latin American countries," said Patricia Krause, an economist for the region with the French credit insurance firm Coface.

With this new proposal, Argentina offers its tradition as a food producer and its sanitary status as a country free of porcine diseases, which is crucial given the impact of African swine fever on China, which last year cost it almost 40 percent of its pig herd. Pork is a fundamental element in the Chinese diet.

According to Krause, the choice of Argentina and not Brazil – an important exporter of pork to China – for this alliance in the installation of mega-farms "is linked to a decision to diversify markets."

Germán Paats, a pig-breeder in Buenos Aires Province, considers that Argentina has the conditions for strong growth in this item.

"We have the climate, the raw material, the genetics and the health as well as the capacity and know-how for the efficient production of the best pork,” he said. “"If we do things well, we could be the partner China needs.”

Mega-farms

One of the aspects most questioned and rejected by environmental activists, who have recently demonstrated in Buenos Aires, is precisely the idea of mega-farms.

"Argentina has had an agri-business problem for a very long time. Industrial farming is something belonging to a past which we need to put behind us because it places all humanity in danger, regardless of whether in Argentina, China or Dubai. They present a tremendous focus for infection, the worst cruelty [to animals], they do not produce better food and they do not solve the problem of hunger," said Soledad Barruti, an investigative journalist who specialises in the food industry.

Neme, however, strongly defended the proposed deal. It must be "mega-farms because we have to be able to export products on that scale, not the odd pig in the backyard of a house. You have to have product tracking, levels of biosecurity, refrigeration and slaughterhouses cleared by the countries to which you are going to export," explained the official.

"Germany has 70 times more pigs per square kilometre than we do so what are we talking about? Nobody can think that in Germany the pigs are contaminating the environment every day. Argentina’s productive capacity is perfectly compatible with the environment," he argued.

In an attempt to iron out the controversy, the Argentine government has incorporated into the memorandum a specific environmental clause, the government says. It is awaiting China’s answer.

"What was already approved will be delayed a month or so by this consideration," pointed out Neme.