Agriculture without capital, work, nor land

In 2010, I met the CEO of Los Grobo Group, Gustavo Grobocopatel, during a conference in Montevideo on regional competitiveness and the future of food under the theme: "What role does Uruguay want to play in the various world agri-food chains in the next 50 years?"

Today, this an Argentinian agri-business company employs over 900 people, has a turnover of over $800 million, and administers 150,000 hectares (throughout Argentina, Uruguay, and until recently Paraguay and Brazil). Additionally, 60% of that land is planted with soybean, specially intended for the Chinese market, where it’s mainly used for animal feed.

This is the most visible and decided side of an agri-business model which has boldly thrown the traditional model out the window; one which could be summed up as agriculture without capital, without work, and without land. In fact, 90% of the land worked by Los Grobos doesn't belong to them; rather it's rented, creating what can be denominated a 'seed pool'. Its group of companies provide management know-how and various services to the farmer collective. Amongst the companies in the group are: Agrofina, which develops agrichemicals and fertilisers; and Frontec, which offers a technology platform of precision agriculture providing consulting and other services to 3,000 producers who sow a million hectares in total.

Nonetheless, the Group have a dark side to their story for which they have been severely criticised. Not only is their business model based on rented lands, but also on direct planting (ie. the debris, weeds, stalks and plant parts left over after harvest are not cleared). This practice of direct planting, together with the use of GMO seeds (with permission from the Government of Argentina), creates a vicious circle of ever-increasing dependency on agrichemicals. 

However, all contentious issues aside, at that conference in 2010, Gustavo proposed as the main thesis of his presentation that "innovating how things are done in the agri-food sector can create competitiveness, sustainability and welfare". In essence, doing the same things, albeit in a different way, and thus creating a new kind of organisation in the agri-business. 

It’s an innovative concept of agri-businesses which necessitates a change in both the culture and the business model: organisations who consider the needs and interests of its individual interest groups (employees, suppliers, clients, public administrations, etc.). In order to promote that transformation, Los Grobo offer farmers a series of programmes to develop: their employability skills and professional development; their capacity for saving and investment; and to encourage entrepreneurship and intra/entrepreneurship, to name a few. The goal is to turning these farmers into true change agents within the Company, their environment, and in their personal lives.

Read the original article in Estrategia Empresarial. (Spanish)

Oscar Valdivielso

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