Contract Farming in South America: The Evolution of Agro-Industries in Argentina and Brazil

Abstract

The focus of this study is on the experiences of Brazil and Argentina, specifically. In both cases, the creation of modern corporate agro-industrial value systems took hold in the post-war period in along process of transformation promoted by states themselves. States deployed subsidies, price-support mechanisms, production quotas and incentives for mechanization, and also upgraded agricultural research capacities. This new integrated agro-industrial value system propelled gains in productivity by expanding economies of scale, while also intensifying land concentration and boosting the formation of oligopolistic markets. It thus also undermined peasantries and encroached relentlessly on indigenous and traditional communities, devastating environmental diversity in the process. Over several decades, the rural population has either remained in the countryside by straddling agricultural and non-agricultural activities, or joined the growing ranks of the urban poor in the bourgeoning labour reserves through an unorganized exodus that intensified the formation of the favelas (slums). In all cases, contract farming advanced precisely on this terrain of inequalities, reproducing the established social, racial and gender hierarchies that have historically characterized the South American countryside. Moreover, inequalities in access to land have increased, despite public policies targeting family agriculture.