Planted surfaces have increased, but funding remains difficult
This year, surfaces planted with processing tomatoes in Argentina should cover 6 600 hectares in total, and the crop could reach a record level. But this sector still needs to improve its funding, particularly for purchasing inputs.
The Argentinian tomato processing industry is strong and considers itself to be competitive, but lack of funding is jeopardizing its development. In recent years, there has been a collapse of the private system for advancing funds needed for the planting season. Currently, the industry is counting on the availability of funding from the Fondo Fiduciario Nacional de Agroindustria (Fondagro), which is a national fund endowed with ARS 1.7 billion (approximately USD 100 million or EUR 82 million).
But, as planting operations get underway (August-December), tomato growers who depend on this funding are finding the situation difficult. These resources are essential for them to buy plants and the basic inputs required for setting up the crops.
As with all the industrial sectors of the region, the processing tomato sector needs to have access to 60% of its working capital in order to launch the season. This translates into approximately ARS 60 000 per hectare (USD 3 500 or EUR 2 900 per hectare), which are essential to the tomato industry of Mendoza and San Juan. Growers explain that for a long time, processors offered an "advance on the crop", which was then deducted from the payments for volumes delivered by prior agreement. But according to the same sources, "the system has severely deteriorated in recent years."
Growers need an alternative solution to overcome this issue. For Guillermo San Martin, who is director of the Association Tomate 2000, all of the conditions are suitable for the industry to really take off, except for the initial impetus of adequate funding, which mainly depends on the Fondagro. "This credit line is intended to provide support for the working capital, in order to help growers fund the implementation of all of the technical measures proposed by the INTA (Instituto Nacional de Tecnologia Agropecuaria). In total, national demand amounts to approximately ARS 113 million, for all of the tomato growers linked to Tomate 2000," stated Mr. San Martin.
A fast growing industry
According to information supplied by the La Consulta INTA, the Argentinian industry dedicated 6 195 hectares last year to growing processing tomatoes, for a total crop of 480 000 tonnes of raw materials processed into tomato sauce, chopped tomatoes, peeled tomatoes (whole or chopped), and a number of other products sold in supermarkets. These results represented a 20% increase in production while, at the same time, planted surfaces dropped 22% compared to the previous season.
However, Argentina continues to import 35% of the tomato products consumed, because local production is not sufficient to supply the domestic market.
"For the next season (harvest scheduled for December 2017 to May 2018, editor's note), we believe that the tomato industry will increase its planted surfaces, approximately 6 600 hectares nationwide, so that we should reach 550 000 metric tonnes. This level would represent a historic record for our industry," stated Cosme Argerich, an INTA researcher in Mendoza, and a technical adviser for the Tomate 2000 association.
Although it has been difficult to improve the sector on a technical level, it benefits from its own system of partnerships that include organizations from the public, private and inter-provincial sectors, constituting a "common front" that brings together nursery operators, growers and processors, mostly from the Mendoza and San Juan regions, who altogether account for 70% of the country's total crop. The goal is to increase the industry's competitiveness, by improving primary production thanks to agricultural yields. Growers estimate that beyond the breakeven point situated between 70 and 75 tonnes per hectare, the crop becomes profitable.