2294 part 1 final report.pdf - Agra CEAS Consulting

Prevention and control of animal diseases worldwide
Part I: Economic analysis: prevention versus outbreak costs
5. Case studies
5.1. Argentina (South America)
5.1.1. Background
5.1.1.1. Importance of livestock sector to the economy
Argentina’s stock of cattle, sheep, goats and pigs totals over 68 million, which represents 1.6% of world
stocks (cattle: 1.6%, sheep: 1.2%). Beef production accounts for 5% world volume. In 2004, the livestock
sector accounted for 2.8% of the country’s GDP and 31% of the agricultural GDP.
The livestock sector is an important generator of export income; agriculture has led the export-driven
recovery of the Argentinean economy following the crisis of 2001. Argentina is one of the world’s top
beef exporters (6.6% of world exports by volume and 5% by value in 2004), and a significant dairy
exporter (0.5% and 1% respectively). In 2004, beef exports brought over US$1 billion and dairy another
US$0.5 billion, together accounting for 11.5% of Argentina’s total export earnings that year. By quantity
and value the EU (Germany) is the biggest importer of Argentinean fresh beef (and Russia of frozen).
Processed meat and dairy products account for the largest share of North American (US and Canadian)
agricultural imports from Argentina.
An estimated 45% of Argentina’s population lives in rural areas (above the average for Latin America),
and a significant proportion of these rely on livestock for income. Nearly 40% of rural households are in
extreme poverty (compared to just over 30% in urban areas): this is estimated to affect more than 200,000
rural households, most of them in dispersed areas.
Despite its significance, the beef sector has experienced long-term stagnation in production, exports, and
by all available productivity measures, although there has been some recovery in recent years. Between
1961 and 2002, land productivity in livestock grew only 50% in Argentina (compared to 150% in Chile
and 300% in Brazil).
Another key weakness of the Argentinean livestock sector is the poor slaughtering and meat processing
facilities. According to the WB, equipment complying with international standards can serve at present
only 25% of output, estimated at 13.5 million tons per year. Uniformity and quality is a requisite to
improve beef production and increase exports and has an effect on prices. Poor meat processing is
estimated to result in price losses in processed products of approximately 15%. In an industry whose
output is valued at US$18.5 billion, lack of quality can result in losses of over US$2.7 billion per year
(A260).
A classification of Argentina’s socio-economic position in the world, as carried out for the purposes of
this study, can be found in Annex 3.
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