Cablegate: Ambassador Discusses Innovation in Argentine Agricultural

VZCZCXYZ0004
RR RUEHWEB

DE RUEHBU #1824/01 2551851
ZNR UUUUU ZZH
R 121851Z SEP 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 9228
RUEHRC/USDA FAS WASHDC

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.

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LOS GROBO
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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.

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CORPORATE INNOVATION IN AGRICULTURE
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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.

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BREAKING THE LAND OWNERSHIP - PRODUCTION LINK
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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.

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ESTABLISHING PARTNERSHIPS
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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.

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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.

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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

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