AMBASSADOR DISCUSSES INNOVATION IN ARGENTINE AGRICULTURAL

UNCLAS BUENOS AIRES 001824 SIPDIS STATE FOR ECON WHA/BSC USDA FOR FAS/OA/OSTA/OCRA/ONA/OGA/OTP/OCBD/OAO/OFSO SIPDIS SENSITIVE E.O. 12958: N/A TAGS: EAGR AR SUBJECT: AMBASSADOR DISCUSSES INNOVATION IN ARGENTINE AGRICULTURAL SECTOR WITH INDUSTRY LEADERS ¶1. (SBU) SUMMARY: On September 10 Ambassador visited Los Grobo, one of Argentina's leading agricultural companies, and participated in a luncheon with several of the sector's leading producers to discuss business innovation and technology adoption in Argentine agriculture. These Argentine companies in the agricultural sector have responded to frequent changes in government policy by developing creative new management structures that have greatly increased the efficiency of the sector. END SUMMARY. -------------- LOS GROBO -------------- ¶2. (SBU) Ambassador visited the Argentine agricultural company Los Grobo in Carlos Casares, Buenos Aires Province, on September 10. He was received by Los Grobo General Manager, Gustavo Grobocopatel, and members of the Grobocopatel family, who escorted him on a tour of the company headquarters. Los Grobo is a diversified company that manages over 110,000 hectares of land in Argentina and 40,000 hectares in Uruguay and Paraguay (as well as operations in Venezuela and Brazil). The group's production is comprised mainly of soybeans and wheat, with the rest in corn and sunflower. In addition to its roughly 400 employees, it works with many smaller supplier companies. In 2007, the company has grown to become an international company with sales totaling more than US$300 million. -------------- CORPORATE INNOVATION IN AGRICULTURE -------------- ¶3. (SBU) Los Grobo directors explained that the domestic agricultural situation in Argentina, where producers often work under onerous government-imposed regulations, requires management innovation to remain solvent. Los Grobo is at the forefront of Argentine entrepreneurship in the agricultural sector and has become a highly successful leader in the agrifood chain by diversifying itself, becoming not just a production company but a services company as well. In addition to building partnerships to attain that goal, it is being accomplished by quick technology adoption - biotechnology, information technology, and agricultural technologies. -------------- BREAKING THE LAND OWNERSHIP - PRODUCTION LINK -------------- ¶4. (SBU) Los Grobo explained that agriculture in Argentina has become an industry of specialization in services, and their strategy is to adapt to that situation. Approximately 70 percent of agricultural production is currently produced on rented land in Argentina. And more than 65 percent of the work is done with rented machinery. This trend has created opportunities for small producers to specialize in services, such as planting, fertilizer or pesticide application, and harvesting. Los Grobo has also adapted to this situation and now produces over 90 percent of its crops on rented land and is also involved in specialized services. -------------- ESTABLISHING PARTNERSHIPS -------------- ¶5. (SBU) Los Grobo directors recognize the need to establish partnerships. One of the company's goals is to establish itself as "the best partner in the agrifood chain." Monsanto is its strategic partner with respect to promoting the use of biotechnology. In addition to commercial partnerships, Los Grobo has also established an educational partnership with Harvard University. This partnership takes the form of educational exchanges and periodic educational videoconferences with Harvard University. Los Grobo also hosts numerous interns and graduate students from several U.S. land grant universities. -------------- AMBASSADOR DISCUSSES AGRICULTURAL SECTOR WITH ENTREPRENEURS -------------- ¶6. (SBU) After touring the corporate office, Ambassador shared a luncheon with the Grobocopatel family and several leaders in the agricultural sector. Topics of discussion included: current status of technical and educational collaboration between our two countries and the desire to enhance that cooperation; the rapid adoption of U.S. technology by the Argentine agricultural sector; support for collaboration on agricultural issues in international fora; and the differences between the agricultural production in Argentina and the United States. -------------- Corporate Social Responsibility (CSR) -------------- ¶7. (SBU) Los Grobo presented a video explaining in detail their CSR Programs in which their main objective is to improve education in Argentina and provided a briefing by two leaders of its foundation. The company formalized its CSR programs under its "Rural Entrepreneurships Foundation" in 2004. The Foundation has implemented several impressive programs including entrepreneurship education in rural towns to create businesses and jobs in rural areas. In addition, they initiated a national reading day, in which more than 800,000 students participated last year. In 2006, Los Grobo social programs directly benefited more than 4,000 people. WAYNE