Apple and pear producers from Río Negro Province today are giving away 10 tons of fruit on the Plaza de Mayo to draw attention to the severe crisis the fruit sector is currently undergoing. Large crowds are lining up to get free fruit.
The president of the Fruit Producers’ Chamber of the Río Negro district of Allen, Sebastián Hernández, told press that the “idea is to give away fruit to explain to people [what we are going through], even if the President, or someone from the administration, doesn’t meet with us.”
Hernández went on to say that producers’ main goal is to “denounce the fact that we are getting paid a pittance” for their products, especially considering supermarkets price fruit extremely high: “In 2015 we got paid an average of AR $1 for a kilo of pears and this year we’re getting AR $2.50, when the cost [to produce said kilo] is AR $4. We get between AR $2 and AR $2.50 for a kilo of apples. It’s a shame that consumers are paying so much when producers get pennies,” he added.
This is nothing new. Food prices started soaring following the Macri administration’s decision to lift currency controls collectively known as the “cepo.” Ever since then, government officials, food producers and consumers have been pointing their fingers at supermarkets for taking advantage of inflation to jack up prices to make a profit.
In fact, consumers boycotted supermarkets on two different occasions in April and May to protest inflated prices under the rallying cry #SuperVacíos (#EmptySupermarkets).
According to a report presented by the Argentine Chamber of Small- and Medium-Sized Businesses (CAME) on July 17, by the time farm products make it to a store’s aisle, their prices are five times more than what they started out on the farm. Although the report shows a slight improvement compared to May’s numbers, CAME pointed out that producers only got 25.2 percent of the final price paid by consumers. Apples and pears are two of the products that have been affected the most by this: according to another report by CAME, consumers pay 12.95 times more for a kilo of pears than what producers receive. When it comes to apples, the number is 13.39.
Supermarket representatives have denied any wrongdoing and argue that that bringing down prices for consumers would be the equivalent of inflating a bubble that would later burst, greatly increasing prices. When discussing oil increases in an interview with Radio 10, Fernando Aguirre, the spokesperson for the Argentine supermarkets chamber, said that, “Freezing prices, in this case oil, altered what needs to happen normally in the market. They [the Macri administration] have to let go.”
According to a report conducted by La Nación, between 30 to 40 percent of all fruit producers in the provinces of Río Negro and Neuquén had to shut down business last year because they weren’t bringing in enough revenue. “Today around 1,800 and 2,000 producers remain in those provinces, while 60,000 people depend on the fate of the industry. What producers make is not enough to cover their [production] expenses,” the report reads.
Moreover, the report points out that during the last few years the fact that inflation rose at a higher rate than the value of the US dollar made producers less competitive in the international market. Why? Imagine that a competitive price for a kilo of fruit in the international market is about US $1. Producers from different countries will set up a price that allows them to sell their respective products, but each will get a different real benefit since the dollar’s purchasing power varies depending on the country.
During the past few years, the dollar’s purchasing power increased at a slower rate than inflation — seven percent annually against 25, according to the report. As a result of this, producers had to raise the price of their products in the international markets so as to get the same purchasing power in local currency as their competitor (or at least to make some profit): according to the report, a 20-kilo case of fruit from Argentina is between US $3 and US $4 more expensive than a case from direct competitors such as Chile, New Zealand and South Africa.
“Usually, the country places between 480,000 and 500,000 tons of fruit overseas, between pears and apples. However, last year the volume was reduced by 12 percent and the industrial sector expects it to drop by about 22 to 25 percent more this year. That’s 150,000 less tons. As an example, the largest fruit-exporting company in the country, expofruit, went from placing 90,000 tons to 20,000,” the report finishes.
The Macri administration, on its end, hasn’t yet proposed a plan of action. In an interview earlier this week, Agro-Industry Minister, Ricardo Buryaile, said there are “certain sectors” that are going through a rough time and that they “still have to see” what happens in the region.