We explain what the agro-export model is, its advantages, disadvantages and other characteristics. Also, causes and consequences.
What is the agro-export model?
The agro-export model It is a liberal economic model, implemented at the end of the 19th century and the beginning of the 20th century in many Latin American countries, but with particular emphasis in Argentina. It proposed the maximum use of the national territory to maximize agricultural production, and Its destination was massive export as the country's main economic activity.
In other words, it was an economic model that, instead of pursuing industrialization, a complicated aspiration given the state in which most Latin American countries were left after their wars of independence, focused on agricultural production and agricultural raw materials to sell to the large industrialized nations, such as the United States, Great Britain and France.
The appearance of this large-scale agricultural model largely coincided with the formalization of Latin American national states, so that it was one of the first ways of organizing Latin American economic production after independence. He aspired to make the most of the areas of fertile land in the region, especially in territorially vast countries, such as Argentina.
In any case, the role of exporters of raw materials was, in essence, the same that the Latin American colonies played with respect to the European metropolis during the colonial era, so that It was a continuation of the colonial economy of the region despite the havoc and high cost of the independence struggle.
Characteristics of the agro-export model
Broadly speaking, the agro-export model was characterized by the following:
- He focused productive energies on agriculture which in many cases translated into the modernization of production techniques and raw material transportation routes.
- It had enormous foreign financial and technological investments as well as with a foreign workforce (especially European) that came to America in spurts, looking for new opportunities.
- This model confirmed the integration of the young Latin American republics to capitalism although from a position of early economic dependence.
- It was a liberal model that accompanied the founding and expansion of states, hand in hand with the allocation of land to private producers and ranchers.
Causes of the agro-export model
The export of raw materials to booming and expanding markets such as the United States It was, at that time, a safe bet given that the industrial powers had dedicated a good part of their peasant labor to industrial work during the 18th and 19th centuries. Therefore, the consumption of Latin American agricultural products allowed them to continue with the production of manufactured goods with high added value.
As we have said, this model was the logical continuation of the economic role that the Spanish-American colony had played in past centuries, which is why it encountered very little resistance among political and economic actors, in general. Besides, The large amount of arable land and abundant foreign investment promised a bonanza economic benefit that the modernization of production techniques would bring.
Consequences of the agro-export model
The agro-export model At first it brought significant economic and productive growth. In addition, it produced a rapid modernization of transportation routes and agricultural production mechanisms.
Literacy grew, there was an important European immigration as peasant labor and in cases like Argentina, jerky, sheep wool and other export products were replaced by cereals such as corn and wheat. This produced a boom in per capita income that surpassed that of more developed countries, such as Germany or Italy.
But the economic boom did not bring with it an industrialization model that would allow these nations to keep pace with the industrial powers, but rather relegated these countries to the role of suppliers of raw materials, dependent powers European and American companies that bought their products.
Thus, after the First World War and the Great Depression of 1929, the consequences were not long in coming: When raw materials became cheaper, countries only dedicated to agriculture headed towards recession economically, unable to compete in the industry with Europe and the United States. The latter forced many Latin American nations to reinvent their economic model, some with greater success than others.
Advantages of the agro-export model
The main advantages that the agro-export model demonstrated for Latin American nations were:
- A gigantic economic growth, which translated into wealth generation and modernization of production and transportation techniques.
- Improving local quality of life fights against illiteracy and growth in the demand for work which, as there were few workers, translated into better salaries.
- Enrichment of local culture already diverse, thanks to massive immigration from Europe and other continents.
- Continuous incentive for foreign investment which brought with it new technologies, new knowledge and new development dynamics.
Disadvantages of the agro-export model
At the same time, the model involved the acceptance of the following disadvantages:
- Implementation of a foreign dependent economy centralized in agriculture and that imported products made by industrial powers (sometimes with their own raw materials).
- He brought a regional economic imbalance to the extent that the sectors linked to agriculture became much richer than the others, especially the ranchers and landowners.
- Promoted latifundia and land ownership, which in the long run brought with it the enrichment of the landowners and the impoverishment of the working peasants.
- Did not promote industrialization but quite the opposite, sentencing the region to a technological and productive delay that would have historical consequences.
Example of agro-export model
There is no better example of the agro-export model than Argentina in the last thirty years of the 19th century. In fact, it was called “the breadbasket of the world,” given the immensity of the volume of agricultural goods produced and exported by the South American nation.
Between 1880 and 1915, the Argentine governments openly promoted the planting of grains and cereals, going from an average export of around 20 tons per year to the impressive figure of 400 tons.
Continue with: Import substitution model
References
- “Argentine economy” in Wikipedia.
- “Agro-export model” in the Government of Santa Fe (Argentina).
- “The agro-export model (1860-1930)” (video) in Economía para todos.
- “The Argentine agro-export model and its discontents” by Patricia Audino in the Argentine Association of Political Economy.
