Gustavo Grobocopatel, Chairman, Grupo Los Grobo: Interview

Interview: Gustavo Grobocopatel

How do you assess innovation in local agriculture?

GUSTAVO GROBOCOPATEL: Argentina’s agriculture sector innovates in terms of processes and in technology; however, it is not very innovative in developing new products or adding value. In that sense, it is difficult for us to move forwards, and this has to do with both a lack of export competitiveness as well as obstacles that exist in the global trade of highly processed products. There is no doubt that the Fourth Industrial Revolution is relevant to Argentine agriculture, not only in relation to biotechnology, but also robotics, precision agriculture, applied microbiology, nanotechnology, the internet of things and big data. Argentina is well positioned in many of these areas, though not necessarily on par with leaders in the US. We can be at the forefront of innovation, but we have to develop the necessary supporting conditions by encouraging farmers who have yet to adapt to new business models to adopt better technology. If the 21st century is the century of genetics, Argentina – due to its size, climate and expertise – could become the centre of a new green industrial revolution.

What new export markets could Argentina tap?

GROBOCOPATEL: In Europe there is an import tariff on agricultural products with added value, which is not ideal for Argentina. In this sense, the EU-Mercosur agreement could help boost Argentina’s value-added exports through a generalised tariff reduction and the creation of tariff-free quotas for certain products. However, China is also becoming an extremely important and large market for our agricultural goods.

The role of the private sector in this regard is fundamental. The World Trade Organisation and the OECD, which Argentina is entering or has already entered, are the veins through which business flows, but local businesspeople are the blood. That is why our role in opening new markets is so decisive. The Argentine businessperson is used to resisting periods of ups and downs, and for this reason the classic entrepreneur finds it difficult to enter new markets and tends to face challenges abroad. Nevertheless, there is a new generation of entrepreneurs who have a renewed business spirit. Better access to cheap and long-term financing through more developed capital markets is key to helping this new generation consolidate their businesses.

What food products should Argentina consider diversifying into in the short term?

GROBOCOPATEL: Argentina has been applying soybean export duties for years, and this – in combination with decreasing international prices – has led to a remarkable loss of global market share to other producing countries. We can recover this lost ground, but it will not be easy. As a consequence of these export taxes, more corn and maize is being cultivated at the expense of soy. The good news is that the government is gradually reducing export duties on soy and completely eliminating them for other important crops. The next step we must take is transforming these crops into animal protein. The pork industry has great potential, and everyone knows the quality of our beef. We must also increase the area under irrigation, and introduce non-commodity crops such as legumes, which are starting to develop and have great room for expansion.

How is the country advancing in terms of infrastructure development in the agriculture sector?

GROBOCOPATEL: Infrastructure development is the basis on which any sector of the economy can grow and develop, not only agriculture. Fortunately, the agricultural areas in Argentina are close to our exporting ports, unlike Brazil, for example. Infrastructure is still a challenge, but one which also provides the opportunity to invest with good returns. The private sector has made great efforts to develop the infrastructure that the agriculture sector needs, but we must find the best way to combine private and public investments to achieve greater efficiencies and scale throughout the country.