Q-1: Mr. Regunaga, you are since a few weeks the new Secretary of Agriculture, following Dr. Berhongoray. As the your predecessor left under difficult circumstances, what are your main objectives for the near future?
A-1: I was also part of the government in 1991. I think that we are facing now almost the same problems. The Argentinean agricultural products have very low prices. Apart form that, another issue are the subsidies that other countries are giving to their producers. We are not able to do that. Not only Europe but also the United Stated had dramatic improvements in the primary, processing and distribution production during the last decade. We are very worried about the commodities and our strategy is to solve this problem. Our plan is to reduce costs and increase our competitiveness. The commodities are one of main agricultural groups of every country. Europe and the United States negotiate 80% of commodities. The food production is also very important for us. That is why we need to promote some macroeconomic policies like the elimination of many taxes. This kind of policies will be a very good incentive for new investments. All this kind of taxes means higher costs in the production and trade of agricultural products. We have to simplify the taxing system. Argentina also needs to regain fiscal equilibrium. During the first half of the nineties, the relation between fiscal deficit and GDP was much lower. The private sector suffered an increase on the expenses in order to maintain the fiscal equilibrium. We are planning to change this situation and to create a new environment for investment and growth. The third issues are the policies related specifically to the sector. This includes again some economic policies but also technological, health and sanitary policies. The Argentinean farmers are facing difficulties in terms of risk management. We will create an emergency law to promote insurance. Finally, we will create new ways of organizing the production. The traditional markets are loosing importance and we need to promote the development of a new kind of contracts to benefit the small farmers. Another significant thing is the quality of food. In this point, we are going to join different public organizations that are involved in these issues. One of them is the SENASA. The first reason is to reduce expenses but also we want to make a dramatic reform in the SENASA to provide the domestic and foreign consumers the certification of the quality of our food in terms of health and sanitary policies. On the other hand, I think that the technical negotiations are today more important than the trade negotiations. Another high priority is to promote everything related to biotechnology and the impact on the environment. This is a strategic tool to increase our competitiveness. I am working with a very special group integrated with well-known professionals in this matter. Argentina and the United States will be the leading countries in the trading of transgenic and biotechnical products.
Q-2: Although genetically modified products are widely accepted in Argentina, as in the US, these products still encounter a strong opposition regarding the European market. Can this perception of transgenic products be changed in the near future?
A-2: Argentina is the second transgenic producer of the world. The biotech products will show its advantages in the middle term. There are not scientific conclusions to prove their impact on the human health. We will be working very hard to be able to discriminate and identify those products. We will sell more expensive corn with high contents of oil and also many vegetables with higher level of vitamins. Argentina will also produce tobacco with a very low level of nicotine. We want to promote these developments. I created the CONABI, the national commission for biotech products in the year 1991. Some foundations will control its impact on the human health and on the environment. Everything that is related to biotech intellectual property is part of an aggressive international strategy. The United States and Canada agree with it too. Brazil and Europe will stay away from these new agricultural products.
Q-3: You were pointing out the priority to implement new technologies in the agricultural sector, biotechnology being one particular segment, but the sector lacks needed capital, investments to do this step, in order to stay competitive. What is your strategy in this regard?
A-3: I am working together with Cavallo to create and promote the correct environment for this kind of investments. We created Fundación Invertir that is an organization that joined the biggest Argentinean companies and whose function is to promote Argentina all over the world. We are also doing road shows to promote foreign investments. Argentina received lots of foreign investments during the nineties. Danone and Parmalat are two companies that invested in processing products during the last decade. Most of the international strategies of these firms have been placed in Argentina and the Mercosur. We have been loosing that position in the last two years.
Q-4: Winery seems to be one of the most attractive fields of investment for foreign capital, since a few years.
A-4: The wine production is one of the most successful Argentinean developments. The local and foreign investors designed a strategy to produce and export a good quality of wine. Argentina has a huge potential for this kind of production. The private sector has a very good experience on this. Our products are now been sold in the United States and in the European markets. Japan is a new and successful market. This is another area that has a lot of investment opportunities.
| Q-5: The exploitation of Argentinean forests has attracted as well the interest of both, national and international investors, in recent times.
A-5: Argentina has a great potential for the forestry production. There are some foreign companies like Shell and other Chilean companies that are investing in this sector. We also have investors from New Zealand, Australia, United States and Germany. Argentina has a forestry legislation that guarantees this kind of investments. There is also a big opportunity in the processing production like in the paper industry. Argentina has also a great opportunity to become an exporter of furniture.
Q-6: As the trade balance still shows a small export share, which consists mainly of agricultural products, Argentina could grow substantially in this regard, if most of the industrialized markets were not protected as they are today. Do you think that this situation will change in the near future? What can you do to support the liberalization of international markets?
A-6: We are suppose to compete, survive and grow with producers that in the United States receive 20% of their income through subsidies, 40% in Europe and 60% or more in Japan. We could achieve this situation. Argentina doubled its grain and milk production during the last decade. So we are prepared to compete also under these kinds of conditions. We will be very aggressive with the future production and subsidies negotiations. Our strategy is based on the low costs. We also have natural advantages. We cannot compete with the high intensive agricultural products but we have big opportunities to produce corn, soil beans and wheat. The future of the agricultural negotiations will be based on identifying their needs and also on the high quality of our wines, olive oil, cheeses and pasta. The meat industry in Argentina is facing a very difficult time. The Mad Cow problem affected the Argentinean exports.
Q-7: The mad cow disease could be as well an opportunity for Argentinean meat on the European market.
A-7: The food consumption declined in Europe and this affected our exports. We need to show the world that Argentina is free of the BSE and that this is one of the most safety countries. BSE is very serious for the human health. In the early nineties, Argentina was one of the countries that most controlled the food diseases. We have to promote this because the European people are very sensitive about it nowadays. The consumers are the leaders of the markets. This will take us a lot of time. The European health organizations also made some mistakes. One of my priorities is to create the most serious and modern SENASA that will be competing with other great organizations of the world. I am particularly committed with this issue because I think that in the future the quality and health of food will be very important. Argentina has faced another problem with the meat that ended in a lack of foreign investments in this area. The food processing industry is very old and inefficient in Argentina. So this would be a good opportunity of investment. The lack of modernization in this area is based on the matter that we have two standards: one for the domestic market and another for the international market. The standard for the international market is higher. These institutions need higher costs and cannot compete in the local market. We need to change the strategy in order to create a single standard. The foreign investments will come with the solution of this problem.
Q-8: Mr. Secretary, a few weeks ago Argentina was an international issue, when foreign fishing fleets arrived at the 200-mile zone and exploited a resource, which apparently was not exploited efficiently enough by the national industry.
A-8: I am totally against of what my predecessor has done regarding to the fish matter. I think that is crazy to discuss what happened beyond the 200-mile zone, when we are not taking advantage of our own resources. We have a lot of domestic resources. This situation has created international problems. Argentina had problems with the hake. There are a lot of licenses for the fishing of hakes. I prohibited giving new permissions in the year 1992 but lots of them have been given before. Argentina is trying to promote the processing and better use of hake. In this case, we need to create a conservation strategy in order to control our natural resources. Some species are a good opportunity to invest in new technologies for fishing. One of them is the merluza. We have a lot of merluza available. We use this kind of fish for commodity. The New Zealanders developed technologies for fishing this specie. They have the technology to process this kind of fish. They can export this fish to the United States. Argentina has a lot of opportunities to develop the fish farming.
Q-9: As you may know our readers are top executives and businessmen. What is your final message to them?
A-9: Argentina will improve its opportunities to receive new investments. This is a high priority for us if we want to grow. Our priority is to make all the efforts that are necessary to promote foreign investments.
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