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Argentina: Rio Negro proposes plan to handle citrus crisis

Just over two months after the Rio Negro fruit growers gave away 10,000 kilos of pears and apples in the Plaza de Mayo, to highlight the sector's crisis, the provincial government presented President Mauricio Macri with a plan to recover fruit growing.

The plan, presented by Governor Alberto Weretilneck, includes a crude diagnosis of activity, and evaluates the costs that make up the loss of competitiveness. This meant that in recent years the number of producers fell by 30%, there was a reduction of the area planted of up to 4,000 hectares, and the harvest distributed between the domestic and external market was reduced to 200,000 tonnes.

The sector's crisis was evident again last month when the closure of the Expofrut packing plant (the largest fruit exporter) in Allen, with 130 layoffs, became known. The same company announced the sale of a similar plant in General Roca, where 70 workers now have an uncertain fate.

In addition to labor problems and a high tax burden, the Government identified the poor quality of fruit packed, the lack of working capital and technological backwardness as the main problems.

With this diagnosis in hand, the government put forward "a proposal for a historic structural change in Rio Negro fruit growing, supported by the implementation of technological innovation in both the farms and in the packaging."

Technological innovation is one of the pillars of the transformation plan to equate their activity with that of its main competitors such as Chile, South Africa and New Zealand, which recently absorbed the markets that were traditionally supplied by fruit from Rio Negro. Rapid impact technological innovation (according to the provincial plan) would lower production and packaging costs and that would increase competitiveness with regards to other producing countries.

This technology (of which no detail was given in the plan) aims to reduce the price of a fruit box (equivalent to 18 kilos) for export to between 4 and 5 dollars. This will make the current average price change from $19 (including labor, supplies, logistics and employers' contributions) to $14. A diversified fruit offer has been proposed with the planting of other species and varieties of pears and apples, coupled with the development of markets of interest to the sector, with priority trade agreements with Russia, the East (India and other countries in the region ), Latin America and the Caribbean.

Rio Negro fruit lost force in foreign markets against competitors such as Chile. That is why in 2011 a total of 676,598 tons was exported, a figure that dropped to 429,427 this year. In the domestic market the decline was lower: from 365,056 tons sold in 2011 to 309,427 this year. To pick up in this segment, the government plans actions in "packaging innovation, promotion, logistics and new business channels."

For farmers, the first link in the chain, the new fruit model aims for "a system of fruit growing organization that is more efficient, with information, to help the producer make decisions on what to plant and also develop its own fruit juicing capability," a model similar to Italy's.

Although no specific funds were discussed at the recent meeting between Macri and Weretilneck, a new scheme to advance with the consensus of all sectors was agreed upon, including exporters, producers and workers, all waiting to be summoned.


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