The Argentine in the Twentieth Century

by Alberto B. Martínez; Maurice Lewandowski

The result has been an excess of production, which led the industry into a dangerous crisis, from which it is now in a fair way to recover. Those who suffered the most were those who had abused their credit by building expensive factories and laying down costly plant; and those who had planted sugar in soils unsuited to its culture, or in regions of unfavourable climate, or where the means of transport were insufficient.

The total area cultivated in 1907 was estimated at about 172,900 acres, of which 14,029 were in the Province of Tucuman; 11,115 in Southern Chaco; 6916 in Salta; 3952 in Jujuy, and 2717 in Santiago de l’Estero; the rest being divided among various other regions of the Republic; these figures representing an increase of nearly 24,000 acres over those of 1895. These 172,900 acres of cane give an average yield of 30 tons of sugar per hectare, or 11·727 tons per acre, representing a total yield of 132,160 tons of sugar.

The greatest number of sugar refineries are to be found in the Province of Tucuman, where there are thirty-two. In the other sugar-growing districts there are only thirteen, which are distributed as follows: Three in Jujuy, two in Santiago de l’Estero, one in Salta, one in Misionès, six on the banks of the Parana River, two in Santa Fé, two in Corrientès, one in Chaco, and one in Formosa.

The net cost of producing the cane, ready for delivery, is about 5 to 7 centavos[64] per 10 kilograms. Taking as

basis a yield of 30,000 kilograms per hectare and a sale price of 12 centavos, the growers would make a net profit of 140 piastres per hectare; or, with the value of the piastre note at 2·2 francs, of £4, 2s. 6d. per acre. Thus sugar-planting is a profitable industry under normal conditions.

[64] The centavo is ¹⁄₁₀₀ or ·01 of the piastre. In metallic currency it is equal to the American cent, and nearly to the English halfpenny; in paper it is worth a little over one-fifth of a penny—·22727 pence.

The outgoings and receipts on an acre of soil planted with cane may be estimated as follows:—

Receipts.
By sale of 12 tons of cane, at 12·8d. per cwt.		£12	16	0
Expenses.
Cost of Planting—
	Tilling and preparing soil	£0	9	11
	Lining out and fixing shoots	0	16	4
	Shoots, preparation, etc.	0	12	9
Cost of Harvesting—
	Cutting 12 tons of cane	0	14	2
	Preparing the cane	0	14	2
	Transport to factory and extras	2	13	5
	Interest on the land, or rent, taxes, and redemption	1	1	3
		————
		£7	2	0
		12	16	0
		————
	Net profit	£5	14	0
		————

With an increased consumption of sugar, the culture of the cane will occupy a far greater area of the belt in which it is already established. It is, however, limited by the interests of the manufacturers themselves, who limit production in order to keep up the price of sugar, and so obtain higher profits; sugar of native preparation being protected by laws which strike at the importation of foreign sugar.[65]

[65] This is an interesting object-lesson in the working of a tariff. Foreign competition once abolished by the increased prices of foreign articles, the native manufacturer will always minimise, and even destroy, the protection afforded by the tariff, by increasing his own prices. If he cannot do so naturally he will do so by lessening his output; with the result that sooner or later the tariff will actually increase foreign imports and still further limit home production. Obviously the only circumstance under which it can permanently profit even the manufacturers is this: a tariff so high as to make importation ruinous; when the home producer will raise his prices until they are just below the line of unprofitable inflation; which, from the context, would seem to be the case in the Argentine. The consumer must suffer, and usually the employé.—[Trans.]