The water-supply in the Tucumán district consists, primarily, of numerous evenly flowing streams which come down the eastern flank of Aconcagua (Lules, Famailla, Angostura, Gastona, Medinas, etc.). They join the Sali to the south of Tucumán. The Sali is an irregular torrent which rises in the sub-Andean depression to the north and Tucumán, and, after squeezing Aguadita between the north-eastern extremity of Aconcagua and the sub-Andean chain of Burruyacu, enters the plain at Tucumán. It then flows southward, meandering over a large bed of shingle in which it has not had force enough to excavate a valley, and the inclination of the land on its left bank (to the east) is toward the east and south-east. The lands on the right bank of the Sali are consequently better provided with water than those on the left bank. The difference is so marked that, as the estates on the right bank get most of their supply elsewhere, the water of the Sali nearly all goes to the left bank. In 1912 a siphon was actually constructed underneath the bed of the Sali to convey the unused water of the Rio Lules to the right bank. Lastly, to the north of Tucumán the Sierra de Burruyacu provides a few intermittent streams of water, which the estancias (ranches) formerly conducted, with great labour, to their represas. These do not suffice for irrigation on a large scale.

The sugar-cane was first grown at the gates of the town and, to the east, at Cruz Alta, on the left bank of the Sali. These were some distance from the mountain because, as there was less rain and the soil was fairly dry, the natural vegetation was less luxuriant, and it cost less to prepare the ground.[33] The Central Córdoba Railway, which passes along the right bank of the Sali south of Tucumán, is the axis of another zone of cultivation and of old factories. Colonization afterwards went further west. A new provincial railway, describing a section of a circle, was grafted at Tucumán (1888-90) and Madria upon the Central Córdoba line. It keeps close to the foot of the range, the falda, and enables farmers to settle on it. The new estates have not confined themselves to the alluvial plain; they have crept up the foot hills, and are constantly going higher. In the latitude of Tucumán the mountain approaches within eight or twelve miles of the Sali, and the possibilities of extension westward are strictly limited; indeed, they are already exhausted. Further south, on the contrary, the plain extends more than fifteen miles to the east of the provincial railway. West of Monteros, Concepción, and the existing line of works, there is a reserve of available land; there is room for a fresh advance westward. There is also room for expansion to the north-east, at the foot of the sub-Andean chain of Burruyacu, where the frosts are slight. It is in this direction that most of the clearing is now going on.

These various districts do not offer quite the same conditions to the farmer. The Falda is the most suitable, not only on account of the rareness of frost, but because of the fertility of the soil, as the tropical forest has accumulated inexhaustible stores of humus. The sugar-cane returns are higher there than anywhere else. Irrigation is not necessary, but, on the other hand, the humidity reduces the proportion of sugar in the cane. Irrigation is the rule in the next belt, between the local railway and the Central Córdoba line (on the right bank of the Sali). On the left bank a large number of the estates must still do without watering.

The most original feature of the organization of the sugar industry at Tucumán is the maintenance of a class of independent cultivators, the cañeros, side by side with the large enterprises. This survival of small and medium properties is a fact to which we find no parallel in the other sugar districts of tropical America.[34] Everywhere else, in Brazil and in the Antilles, the farms which worked up their own produce, on primitive methods, have been absorbed by the central works. The home-worker has lost his land as well as been ruined in his industry by the competition of the modern factory. At Tucumán, on the contrary, the sugar industry never passed through the stage of domestic production. It was set up in full development, some devoting their capital to building works, others to growing the cane. Irrigation seemed from the first to dictate a concentration of ownership; the refineries at Cruz Alta constructed costly special canals to bring the water of the Sali. It is only large proprietors who have the resources needed to carry out work of this kind, and sufficient influence to secure permission to conduct the water over adjoining estates. However, the law of 1897 reorganized irrigation and withdrew the water-supply from the control of a few privileged big capitalists. Public works, undertaken by the provincial authorities, brought the water within the reach of every farmer. Since 1897 the number of water-concessions has risen from 230 to nearly 2,000.

The interests of the factory (ingenio) and the farmers (cañeros) are not indissolubly connected. Their respective parts in the final product of the sugar industry are not invariable. The increase in the number of factories means an increase in the number of cane-buyers, and so tends to raise the price. During the years antecedent to 1895 the refineries improved their machinery, and their productive capacity increased faster than the cultivated acreage. The price of the cane then rose to about twenty piastres a ton. As this figure is far above the net cost, the refineries endeavoured to profit themselves by the advantages that accrued to the cañeros, and they bought land for cultivation. It is to this period that the big concerns of Cruz Alta belong. Afterwards the production of cane increased, and nearly met the demands of the refineries, so that their competition relaxed. They ceased to buy land, and the price of cane was lowered.

The refineries now deal with cane which they grow themselves, with paid workers of their own; with cane that they buy at a reduced price from tenants (colonos), who grow it on their own estates; and with cane sold them by cañeros who own their own fields. The range of the country absorbed by each refinery is often very extensive. The Sugar Congress of 1894 estimated that half the cane-harvest was transported by rail, and that freight from one canton to another in the sugar district brought the railways more than a third of what they got for conveying sugar from Tucumán to the coast. Each railway company tries to keep along its own line the cane it carries to the refineries, so that the transport of the sugar when it is made will fall to itself. Thus the cane-market is divided into two separate compartments, with very little exchange between them. The first comprises the zone that depends on the Central Argentine and the State Railway; the second is the zone of the Central Córdoba and the old local line bought by the Central Córdoba.

Certain parts, such as Cruz Alta and the district round the town, have too many works in proportion to their production of cane, and they are centres of import. The price of the cane is always higher here than in the agricultural districts. Each works has its customers. At the stations it instals weighing machines for receiving and weighing the cane. It is only the more important cañeros who have the privilege of selling by the truck-load, or selling to distant works. The small growers are compelled to deal with the local refinery. They sell it their canes direct, or, sometimes, through agents and dealers. In the days when the works were competing for cane it became the custom to sign the purchase-contracts as early as possible; sometimes at the beginning of October, as soon as the harvest of the year is over. In order to make sure of the loyalty of the cañero the manufacturers advance money to him, in proportion to their difficulty in getting cane.

Cañeros and mill-owners have had to work together to settle the problem of labour. There was not enough at hand, and it had to be recruited elsewhere. Agents were sent all round—to Catamarca and Santiago del Estero, and even to the province of Córdoba—to collect and bring gangs of workers. They were a mixed, unsteady, undisciplined lot. The owners of the works advanced them money in order to keep them, and then, fearing to lose the money advanced, would not dismiss them for laziness and irregularities. These troubles are not felt as much now as they were at the time when the industry was expanding. The population of immigrant workers has settled down and taken root. Besides creoles it includes a small number of Italians and Spaniards; but while the creoles have been definitely incorporated in the sugar industry, the European immigrants use their savings to buy a bit of land and take to farming.