Meanwhile, on the other side of the world, South Africa has declared a national disaster as extreme drought ravages the Western Cape region.
The effects of water scarcity on a country’s agricultural sector can send ripples across domestic economies, and are reflected in national economic indicators.
The cases of Argentina and South Africa bring into sharp focus the need for policymakers to shield the economy from future droughts, particularly given the threat of a changing climate.
In the case of a major agricultural exporter like Argentina, a drought can also reverberate across international markets as global commodity prices react to changes in production As recently as October, Argentine farmers were expecting to expand their corn planting, but are now braced for the worst harvest since 2009, which at the time was heralded as the worst drought in 100 years.
“Even with irrigation, there is a level of vulnerability due to the fact that the water shortages, which are usually associated with droughts, can impact irrigated agriculture as well.” While famine is not a risk here, the drought has severely impacted farmers’ growing schedules.
As of January, only 72 percent of the 44.7 million acres in the country dedicated to soy crop had been planted.
Tariffs are now on track to reach 18 percent by the end of 2019, down from 35 percent when Macri was inaugurated.
Corn and soy may be the most impacted crops, but damage from drought is not isolated to the agricultural sector.
All trouble in the Western Cape The drought plaguing South Africa’s Western Cape region has diminished its projections of agricultural output by a fifth compared with last year.
This will also cause South Africa to increase its wheat imports to 2.1 million tons in 2018, up from 935,000 tons 2017.