Argentina looking to secure irrigation financing despite macro hurdles

Argentine authorities are looking for financing for irrigation projects amid a severe drought that has hit the country’s main agricultural hubs in Buenos Aires, Córdoba and Santa Fe provinces, but are aware that in order to do so they will have to address key macroeconomic weaknesses. 

“It’s clear that the macroeconomic conditions aren’t what we would like. We are working hard so in 90 days we are able to improve in the macroeconomic level to give confidence to the market,” agriculture, livestock and fisheries secretary Juan José Bahillo said in response to a question from BNamericas.

Among the sticking points are inflation and relationships with the private sector, said Bahillo. 

Bahillo made the comments during a webinar held by the Wilson Center. 

As of the end of October, planted areas suffering “severe drought” reached nearly 23mn hectares, up from almost 7.2mn in September, according to the drought monitoring office of the economy ministry.

Hectares with “slight drought” conditions increased from 89.4mn to nearly 94mn in the period, while those under “moderate drought” went from 44.7mn to 46.8mn.

In total, there are over 163mn hectares affected by drought conditions in Argentina.

These include all agriculture land in the capital city, as well as 78 municipalities in Buenos Aires province, 17 departments in Córdoba province and 13 departments in Santa Fe.

Authorities have resorted to external financing to carry out irrigation projects in the past. 

The Inter-American Development Bank (IDB) approved a US$810mn credit line in September to support water management efforts, including securing water for irrigation and livestock.