Several studies have shown that the constraints to the adoption of a new technology, using fertilizers as an example, are, in descending order of importance:
Lack of credit.
The attitude of the producer, including the capacity to assume risks, use of business planning practices and management control.
Low profitability of some alternative technologies, very variable in the case of fertilization.
The scale of production.
The credit constraint is one that increases with the level of technology. Lack of external finance is a very important limiting factor for the adoption of high levels of technology. The progress from the low level of technology to the medium level is associated with improvements in management practices, while that of the high level is associated with the adoption of capital-intensive technologies.
Deficiencies in management competence decrease with the increase in the level of technology, evidently with the larger producers having the higher level of competence.
Among the less important constraints are the difficulty of adapting production to demand (common to small and large producers), the difficulty of marketing larger volumes and a quality that differs from the normal quality, social organization of production (seeking of reducing cost of scarcer factors through contractual arrangements is a generalized practice for smaller and larger producers) and difficulties in obtaining labour.
The difficulty of selling higher volumes of product or products of different quality increases with the technological level. The difficulty of finding qualified labour also increases with the level of technology.
INTA’s ‘Perfil’ study identified, as lesser restrictions, inadequate professional services, supply of inputs (not important as regards fertilizers) and precariousness of land occupation.
As regards the outlook, the plan in Argentina is to increase soybean production to 100 million tonnes from the present 74 million tonnes. This will involve not only an increase in the sown area but also major improvements in the meat production sector - beef, poultry and pigs - concerning the use of maize and sorghum, in order to add value in regions far from the ports.
The position is similar with fruit and horticultural crops. Land is available and so is export capacity but there are inadequacies in the production chain. The traditional stakeholders lack capital and their ability to manage production for export is limited.
If the production of 100 million tonnes of soybean is to be reached by 2013, an annual growth rate in production of 3 percent will be required, compared with 6 percent during the 1990s. This increase would be obtained by an increase in the sown area and in yields. An overall increase in the area of 2.9 million ha would be required compared with the increase of 6.8 million ha between 1993 and 2003. This represents 290 000 ha per year, i.e. 1 percent p.a. compared with 3 percent p.a. during the past decade. The yields during the past decade have increased at a rate of 3 percent p.a. with an overall increase of 725 kg/ha. For the coming ten years, in order to achieve the target, an increase of average yields of 2 percent p.a. is needed, with an overall increase of 588 kg/ha, to reach 3 333 kg/ha. This could be achieved through biotechnology and increased fertilization.
Even with an increase in the soybean area of 2 percent p.a. the impact on fertilizer demand would be limited. A higher share of soybeans in the range of agricultural products constrains the increase in fertilizer demand. It can reduce fertilizer consumption when it is at the expense of maize, rice and sorghum, cereals with higher fertilizer consumption per ha than soybeans. The new soybean areas often have soils with a high phosphorus level. However, soybeans grown without fertilization will lead inevitably, sooner or later, to a progressive fall in nutrient reserves and a need to apply fertilizers.
There has been little increase in the overall cultivated area in the Pampa region during the past decade, except in the northern provinces, principally Chaco, Santiago del Estero, Salta and Tucumán, where there are large reserves of fertile land. Little progress can be expected from an increase in the proportion of the total area that is fertilized in the Pampa, since it is already close to the ceiling.
There is still some potential for increases in the average rates of fertilizer use on grain crops. (Average yields of maize and wheat are still below those of the United States, for example.)
Fertilizer consumption should be boosted also by an expansion of the irrigated area, currently 1.6 million ha, during the next 25 years. Increases of 16 percent in the arid and semi-arid zones and 27 percent in humid zones are projected.
As regards the Northern Regions, in Chaco, Santiago del Estero and Salta scarcely 25 to 30 percent of the best land is cultivated. The cultivated area in these regions has grown at a rate of 5 percent per year. Directly sown herbicide resistant soybean is the main new crop, rotated with maize and, marginally, with wheat. The sunflower area is also increasing; soybeans and sunflowers are expected to reach 60 to 70 percent of the total area. The land in these new areas is relatively fertile and is not much fertilized. However, the nutrient reserves of their soils decline very rapidly, unlike the case with humid Pampa’s soils.
