The Producer and the Contractor

Harvest season has started for this area of Argentina. I was able to see how one contractor and producer interact with each other, and it was very interesting. It was also a lot fun to see a good crop of corn harvested. Santiago Nobile farms near Canals, Cordoba and he had corn that was at 22% grain moisture. Normally, Santiago and most producers wait until the corn is 16% or less before they harvest for grain. They have warmer, drier winters and usually are not concerned with rain.

Likewise, contractors are familiar harvesting dry corn. This day, Santiago visited the fields to see how harvest was getting started. Santiago and the contractor tossed a metal circle that was 0.25 m² and collected all of the seed on the ground. They did this a total of four times and then weighed the grain to determine how much was coming out of the back end of the combine. Too much was coming out, so the contractor made some adjustments and go the grain loss down to acceptable levels.

Stalk strength was weak in the field, due to the excessive rains, and the ears were barely hanging on to the plants. I told Santiago that I thought the earlier harvest was a very good decision, especially since more rains are forecast over the next couple weeks.

The contractor owns a combine, tractor, grain cart and a camper. The contractor moves a long way from home and he wants to harvest as much as possible as long as possible. Having a camper to stay on site allows the contractor be more efficient during harvest. Having equipment in good working condition is important as well. In this case, the contractor owns a New Holland CR9060 that was in excellent condition. The tractor and grain cart were also in good condition.

Contracting is a good business decision for the grain farmer in Argentina where there are no subsidies. In addition, credit is expensive with interest rates above 15 or 20%. With high costs for credit and no safety net in a bad year, investing directly in machinery is a dangerous business. Renting equipment and labor is a much safer decision. Santiago hires contractors for planting, fertilizing, spraying and harvesting his crops.

Because they are not running machinery in the field, farmers like Santiago are able to devote more time to their economics, marketing and business plans. Many farmers double-check the contract work by taking stand counts after planting, walking fields after spraying and counting grains that come out the back end of the combine.

The negative of contracting is that a contractor makes more money by working more land. That system encourages the contractor to hurry, which can lead to poorer planter performance and more harvest losses. Santiago's contractor was driving no more than 5 km/hr (3 mph) and his combine could clearly handle a faster speed. Again, harvesting this corn early reduces the pressure of having to get to the next field. That allows the contractor to drive slowly and get as much corn as possible.

CREA - The Structure

CREA (Consorcios Regionales de Experimentacion Agricola or Regional Consortiums of Agricultural Experimentation) is an organization of farmers who work in small groups to improve each farming enterprise. Each group has about 10 farmers. Several groups make up a region. In the case of Sur de Santa Fe, there are 17 groups. The regions make up the Argentina Association of CREA (AA CREA or AACREA).

Each group hires and agronomic advisor who visits each farm once a month and makes agronomic and economic suggestions to each farmer. The farmers (productores) of the group meet once a month to review crop records, etc. (See the post on 12 Feb for more details about a group meeting.) As mentioned in that post, one farmer provides details of the enterprise (crops, yields, expenses, returns, etc.) to the rest of the group. The group reviews the details and makes suggestions and criticisms to the producer.

The region hires a coordinator who helps plan monthly meetings, works with the advisor, and helps coordinate regional research projects. Seed companies pay to have hybrids and varieties entered into large-scale plots that are replicated 12 to 14 times in a region. Farmers also conduct some research with their advisors and with other farmers in the groups. The results of this research are published and discussed at regional meetings. The region hosts three meetings a year, one for corn, one for soybean and one for wheat. Some of the meetings are repeated in a different part of the region. Farmers, CREA members and non-members, are welcome to attend the meetings. A fee is involved.

Each group elects a president to serve for two years. The president attends a monthly CREA regional meeting. The presidents of a region elect a vocal to serve for two years. The vocals attend the regional presidents meeting and a national AACREA meeting once each month. At this point, CREA appears to be a very "bottom-up" approach, where many decisions are made at the local level. Each group pays money to the region and to the national organization. The national organization also organizes a meeting (or two) once a year for all farmers. They conduct some other types of research, such as the impact of agriculture on the economy. I have a meeting next week with AACREA in the City of Buenos Aires and hope to learn more about the national organization.

Each group is responsible for hiring an advisor and setting the wages, benefits, etc. for that advisor. The advisors are part-time for a group. Some advisors work for two groups, but in different regions. Other advisors take on private clients outside of CREA and/or rent land to make additional income. Most advisors begin as assistants for larger groups. Also, many advisors say that they make more with the private consulting than with the CREA, but being a CREA advisor opens the door for them to do private consulting.

The regional coordinator is also a part-time position and private consulting or management of farms are often done to supplement income.

I have been told by people in CREA and out of CREA that CREA farmers are generally larger and generally known to have good farming practices and good business skills. My view of Argentina grain farming is probably a bit skewed at this point since I am visiting mostly CREA farms.

I hope to visit a few other farms while I'm here, so maybe I'll get a bigger picture of agriculture in Argentina.

CREA - The Group Meeting

This week, I was invited to attend a CREA group meeting (CREA Posta Espinollos). About nine farming operations were represented. Husbands and wives were welcome. Most in the group spoke English, but the meeting was conducted in Spanish. Periodically, someone would translate for me. Not knowing Spanish was a limitation in that I missed a lot of the conversation. On the other hand, I was forced to pay close attention to facial expressions, body language, eye contact, etc.

After introductions, the group settled on the covered patio with coffee, yerba mate and pastries. For the first two hours, each person took turns updating the rest on their operations. Most had too much rain. As the morning progressed, we dodged the warming sun... moving chairs to the shade. There were no shorts at this meeting... this was business. But it was more than business. There was lots of laughter, joking, pointing and jumping into the conversation.

The group president is Maximo Uranga and it was his turn to host the meeting. While that meant Maximo provided the food, beverages and house, it also meant that Maximo had to present his business operations for the past year. He took about 90 minutes or so to review a booklet he put together for each person in the group. It included the financials for the last year, the projected financials for the coming year and the objectives for his business as well as his family. Yields, land in each crop and a graph of the past 13 years were also included to help each member understand Maximo's business.

After Maximo was finished, the group broke into two smaller groups and discussed Maximo's questions. Maximo and the CREA advisor, Juan Pablo, were not allowed to participate in the smaller groups. The details of the business and the problems addressed are to remain within the group, so I will not discuss them here. The topics related to farm business structure, economics and family. The smaller groups worked for about an hour on Maximo's questions. One person in each small group  wrote notes. After both small groups were finished, everyone met in one area again. One person from each of the smaller groups read the notes to Maximo. Again, I wish I knew Spanish. I could tell from the facial expressions that Maximo was both excited and nervous to receive the comments from the groups. It takes a lot of courage to take criticism from peers. This criticism is what improves everyone.

Once that was complete, they had a guest speaker talk about something of interest. In this case, I was the guest speaker. I hope it was of interest.

After that, the CREA group met alone (without Juan Pablo or me) to discuss institutional issues of the group. It was a very interesting day.

Maximo presents his business information to the rest of the CREA group.

The smaller groups discuss the questions of Maximo and other issues relevant to his operation.

Maximo receives the reports from the two small groups.

Manuel reads the notes from the small groups as Juan Pablo, the CREA advisor, records the comments.

Argentina - Getting Started

The goal of this blog is to provide some brief updates on my sabbatical in Argentina. My purpose for being here is to learn more about how farmers here work together to improve agronomics, economics and the sustainability of their operations.

Some farmers here have formed groups of about 10 people. These groups are called CREA (an acronym that I will have to pull in later). These groups hire an advisor who visits the fields of each farmer once a month. In addition, the farmers meet as a group about once a month. In these groups, one farmer will provide all details of his/her operation, including the economics. The other farmers will review the details and provide feedback on ways to improve the operation.

Each group elects a president to serve for two years. The presidents of all groups in a region elect a 'vocal' to serve two years. The groups in a region also hire a regional coordinator.  Santiago Nobile is president of his CREA group. He and his family helped us looked for housing. Jorge Minteguiaga is the Regional Coordinator for CREA Sur de Santa Fe and he also helped us look for housing. Carlos Jolly is the Vocal for CREA Sur de Santa Fe. Both Santiago and Carlos have welcomed me to their homes.

Santiago and Jorge gave an overview of CREA to our Kentucky farmers when they visited the area. At the start of the presentation, our farmers said there was no way this could work in Kentucky. By the end of the week, they thought that CREA might be a possibility. During my sabbatical, I'm going to try to figure out if a concept like CREA would work back home. To do that, I need to learn how CREA works. Stay tuned...