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The London School of Economics

Reseña: "The Political Economy of Agricultural Booms: Managing Soybean Production in Argentina, Brazil and Paraguay" por Mariano Turzi

Mariano Turzi, director del Programa Asia Pacífico de la UTDT, publicó recientemente "The Political Economy of Agricultural Booms: Managing Soybean Production in Argentina, Brazil and Paraguay". London School of Economics and Political Science (LSE), en su reseña, lo destaca como un "valioso volumen que contribuye a entender la economía agrícola y el desarrollo económico".

Por Josselin Canévet

In The Political Economy of Agricultural Booms, Mariano Turzi creates and dissects an anatomy of soybean production in Latin America. Using the three case studies of Argentina, Brazil and Paraguay to illustrate and contextualise his analysis of Latin America’s soybean production, Turzi’s book offers an examination into agribusiness and the political economy it generates. The text is intended for an academic audience: it is jargon-heavy, using a significant amount of technical language. While a compact book of 140 pages, this is still a challenging read. However, its contents are welcome contributions to agroeconomic scholarship. Tuzi’s analysis is brilliant, using political economic theory to draw enlightening, if not concerning, attention to an underdeveloped section of the literature.

The book’s thesis is broken down into three parts, beginning with an overview of the political economy of agriculture before introducing Latin American soybean production. Soybeans have arguably become the single most important input in the global food system as the largest source of animal feed and a major source of human food. Simultaneously, the issue of ‘peak oil’ is causing many grain oils to be used for biofuels, only increasing the demand for soybeans. The importance of soybeans has therefore expanded in the global agricultural system, and this trajectory is only likely to continue. At a regional level, in 2015-2016 Brazil, Argentina and Paraguay produced 76% of all soybean production (13). Consequently, the ‘Southern Cone’ is the current centre for the global production of the soybean.

The second section of the book analyses the global agricultural sector and the seed industry and examines global agribusiness trade through a political economy lens, also drawing on Marxist and Gramscian thought. In economic theory, the agricultural sector is utilised to subsidise other industrial sectors such as manufacturing. This model of development was propagated by the World Bank and other development institutions, hence the significance agricultural production possesses in Latin America economics, as quantified by the percentage of agricultural products in the region’s GDP and exports. Despite agriculture contributing significantly to development in Latin America, the agricultural sector is often seen as ‘backwards’. Yet, land has a special economic status in developing and unstable economies. Land is a productive asset, which can be used to hedge against economic uncertainties, or alternatively liquidated to provide access to finance. As a result, rather than simply being a productive unit to finance other industries, the agricultural sector develops new dimensions: in itself, it is a financial asset and attractor of investment.

Turzi advances the thesis that agribusinesses’ power is particularly created and maintained by their ability to finance research and development (R&D). He explores the supply-side economics of soybean production and how it is shaped by agribusiness, capturing all key areas in the production chain. This has ultimately eroded the power of the state and created a unique mode of production: that of the ‘soybean republic’, from the production of agricultural chemicals, for example the weedkiller Roundup, the creation of genetically-modified (GM) seeds to being the biggest funders of R&D. The ‘soybean republic’ is a welcome unit of analysis in the literature, highlighting the role of multinational corporations, for which the case studies provide context and ground the theory in reality.

The geo-economic pull of transnational corporations is re-organising the territorial boundaries of Argentina, Brazil and Paraguay, redefining them into a single soybean production unit. This highlights a greater issue in the political economy: large businesses are visibly redesigning societies for profit. Whilst societies have been shaped by business in the past, a new precedent is for businesses to now reshape entire regions and countries, using financial instruments, infrastructure, taxes and duties to streamline regional soybean production. Turzi paints a grim picture of the ongoing situation. Global agribusiness, composed of groups such as Monsanto and Cargill, has created a global monopoly over the seed supply chain. This power translates to other areas of the soybean production chain, and ultimately makes the state subservient to the influence of foreign multinational corporations.

Through examining Paraguay, the least economically developed of the three countries, Turzi argues that Paraguayan society and the state have been colonised by agribusiness through the control that it has on soybean production. Foreign investors and agribusiness have captured the state, causing conflict between the state and landless agricultural labourers. This situation highlights the political nature of foreign investments in the agricultural sector. The growth of Paraguay soybean production has resulted in neo-colonisation by multinational corporations. Multinational corporations operating in Paraguay are predominantly based in neighbouring countries such as Brazil, yet control the majority of the industry. Furthermore, many Paraguayan landowners are of Brazilian descent, leading to conflict between Brazilian émigré landowners and Paraguayan agricultural labourers.

Argentina is a story of struggle and confrontation between the state and agribusiness, with the state largely using its prerogative to limit agribusiness until 2015, such as by refusing companies from collecting royalties from seeds. It also has a tendency to predate on agribusinesses profits, due to the government’s anti-agricultural bias: to illustrate, the soybean sector was taxed at rates of 44 per cent in 2007 as a source of income for the government (121). The soybean sector is therefore a rent generator from which the government intends to extract as much revenue as it can. A history of strong and established institutions prevent agribusiness from being able to firmly entrench itself in Argentinian society.

Finally, in Brazil, agribusiness and the state have managed to successfully integrate and co-exist. Agribusiness has strengthened local government and state capacity. The economic significance of agriculture in Brazil has resulted in the soybean industry being a driving force behind the economy, aiding the development of infrastructure such as roads and consequently state capacity. Agribusiness has also achieved its political agenda through the use of a strong and established lobby, enabling it to create alliances between sectoral organisations and key players. In return, local government has enabled further development of agribusiness through beneficial legislation and lax implementation of environmental regulation.

Turzi’s analysis of soybean production in the three case studies dissects the political economy of Latin America and, to an extent, that of other developing regions, examining the role played by agribusiness and its dealings through the supply side. The book notably advances the concept of a ‘soybean republic’: an economic model that highlights the geo-economic pull of transnational corporations, which is altering regional borders. This book makes substantial contributions to the disciplines of agroeconomics and development. Whilst challenging, it is a rewarding read.