2002 was a great year for Argentine farmlands and, thanks to that, refreshing signs of
reactivation have turned towards other agricultural activities. The agricultural machinery industry was one of the main beneficiaries of Argentina's economic "summer", encouraged by good prices thanks to record
harvests, the opening of new beef markets and the devaluation of the Argentine peso in relation to the U.S. dollar. The end of the "one peso to one US dollar" exchange rate that was held for 10 years hurt many
players in the Argentine economy, but for productive sectors and particularly, agricultural machinery, it created huge local and international possibilities. With a projected 30% growth for companies in this sector, and
the sudden possibility of reaching important markets such as Brazil, Spain and Mexico, this industry has slowly begun to make good on its potential.
Regional Importance
In Argentina, the country's
leading industries are mostly located in its main cities. Agricultural machinery is an exception. According to information provided by the Federal Council of Investments (CFI) most of these enterprises are distributed
throughout the rest of the country, in small cities and mainly in the "Pampas" Region.
"The provinces of Santa Fe, Cordoba and Buenos Aires concentrate 86% of the 368 establishments that, according to the National
Industrial Registry, are dedicated to agricultural machinery. Santa Fe itself counts with 182 firms, 50% of the ones registered with this organization," pointed out the CFI statistics.
This factor is not casual.
Agricultural machinery productive centers emerged together with the progress of agriculture and responded to the demands for implements and machinery. This is why the activity has been tied, from its very origin, to
agriculture.
A fine combination
The growing demand of agricultural whole goods during this year is pushed by the recent currency devaluation. The increase in prices of foreign products is ideal for
the substitution of importations. In several cities of the "Pampa Humeda" region, the reopening of workshops and auto parts factories slowly began to reappear, which inevitably carries the recovery of an important
amount of jobs. Important companies –victims of the economic crisis- also reopened their doors, such as Zanello in Cordoba and Massey Ferguson in Santa Fe.
Producers that this year invested in machinery counted –in
exchange for the lack of credit- with two options: the purchase of Boden (a bond released by the National Government) and payment with grain. The first alternative left many doubts and didn't completely convince
producers; the second option was much more successful and according to calculations, nearly 70% of transactions were through this method, which uses grain as currency.
The awakening of the agricultural machinery
industry represents economic exoneration for many cities. The substitution of importations is an extremely important economic and labor milestone which must be defended and conserved in order to strengthen it.
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