Agro -export Model (Meaning and Explanation)

We explain what the agro -export model is and what were its causes and consequences. In addition, its general characteristics, advantages and disadvantages.

What is the agro -export model?

The agro -export model is A form of economic organization Characteristic of some Latin American countries, particularly from Argentina since the end of the 19th century until the 1930s. It consisted of the use of fertile lands to develop agricultural and livestock production with the aim of exporting food and other raw materials.

This model established an important economic flow between some industrial powers, such as Britain, France and the United States, and Latin American nations that until then occupied a marginal position in the world economy. Countries like Argentina were inserted in this way in world trade as raw material exporters and export became its main source of income.

The agro-export model went through a brief period of crisis during World War I (1914-1918) and concluded when the great depression broke out in the 1930s. In Argentina, the years of the agro -export model were the stage of greater economic growth in its history.

Key points

The agro -export model was implemented by Latin American countries between the late nineteenth and early twentieth centuries.
It consisted of the use of fertile land and foreign investments to produce agricultural raw materials directed to export.
The main example of this model was Argentina between 1880 and 1930, which achieved remarkable economic growth with the export of wheat, meat and wool.

Origin of the agro -export model

The agro -export model was born in countries with extensive fertile lands.

The agro -export model It emerged in the nineteenth century in countries that had extensive fertile lands that could be used for agricultural and livestock production. The most characteristic example is the Pampas plain in Argentina.

These were young nations, whose independence from European empires had been achieved in the early nineteenth century. Its national organization processes began to consolidate in the mid -nineteenth century, but They needed foreign investments and imported machinery to be able to modernize and undertake an agricultural or farmer project on a large scale such as the one projected by their ruling classes.

The agro -export model obeyed the logic of the International Labor Division. In the context of the second industrial revolution, The central countries (such as Great Britain) demanded raw materials for their industry and foodand peripheral countries (such as Argentina) satisfied this demand through large -scale production of raw materials, encouraged by foreign investment in infrastructure for production and transport. Both, Agroexporting countries became a market that consumed the manufactures and machinery of industrialized countries.

Causes of the agro -export model

The main causes of the agro -export model were:

The Industrial Revolution in Europe and the United States, which fed the international demand for raw materialsas the agricultural products of the Argentine countryside demanded by Great Britain and France. The industrialized countries exported manufactured products and machines to agro -export nations, according to a model called International Labor Division.
The amount of fertile land available in exporting countries. In Argentina, the Argentine Army campaign against the indigenous people of Pampa and Patagonia, traditionally called “Desert Conquest”, implied the appropriation of large areas of land that were ceded or sold to landowners, stagnant and soldiers. This favored wheat production and cattle raising.
Foreign investment in exporting countriesas the British private capitals that allowed to install railway lines and refrigerators in Argentina. The improvements in transport shortened the distances (for example, between the productive areas and the port of Buenos Aires) and chealed the costs. The importation of agricultural machinery by land owners depended on a credit policy promoted by the State.
Technological innovations coming from industrialized countries, which in Argentina increased productive capacity, such as steam planting and harvesting machines or wind mill to obtain water from underground napas. An especially important technological novelty for the Argentine economy was artificial refrigeration, which allowed animal meat to be conserved in refrigerators and transport it into ships refrigerated to Europe. In this way, cattle that until then offered leather and sebum for the external market became a miscegenation that allowed to obtain refined and tasty meats for export. Alte alfalfa sown was also important to improve pastures.
The consolidation of the national and legal orderas happened in Argentina from 1880 with the federalization of Buenos Aires, the organization of national territories, the creation of organizations such as the National Mortgage Bank or the Ministry of Public Works and a deep task of legislative order.
The growing use of fences to delimit landwhich allowed to ensure the private property of the fields and separate the land dedicated to the agriculture of those dedicated to livestock, which prevented animals from damaging the sown.
European immigrationwhich in Argentina grew remarkably from the immigration law of 1876 and offered an abundant labor to work in the countryside and cities.

Consequences of the agro -export model

The most important consequences of the agro -export model were:

The growth and modernization of the agricultural sectorwhich in Argentina depended largely on the importation of agricultural machinery.
The expansion of railway lines In agro -export countries with the investment of foreign capital (mainly British) and the improvement of other infrastructure works, such as the construction of the new port of Buenos Aires in Argentina.
The increase in exports of agricultural resources (such as wheat, corn, wool, leather and meat) and imports of machinery and manufactures from industrialized countries.
Economic growth that, in Argentina, it was by the hand of the foundation or modernization of cities, the state promotion of Immigration and education, the establishment of a unified currency, the prosperity of stagnant who were traveling around the world and The progressive formation of a middle class.
The difficult living conditions of less favored sectors (among which socialist and anarchist ideas were disseminated).
External indebtedness Due to the requested credits for infrastructure investment, which in Argentina motivated various forms of speculation and caused a financial crisis in 1890.
The economic delay of the areas that were left out of the agro -export model, such as the artisanal and mining industries of the provinces of Norte Argentino, whose population lived an impoverishment process.
The dependency of agro -export countries regarding demand and external market priceswhich implied that the outbreak of World War I (1914-1918) momentarily stopped economic dynamism by reducing exports of some products (such as cereals), and that the great depression of the 1930s marked the final crisis of the agro-export model.

You may be interested: Treaty of the European Union (1992)

Advantages of the agro -export model

Many European immigrants arrived in America to work in the countryside.

The main advantages of the agro -export model were:

Foreign capital flow. The entry of private capital from industrialized countries (such as Great Britain) favored investment in infrastructure and modernization works.
Immigration. Numerous countries in America witnessed waves of European immigrants who generally installed in the fields to work as rural parking lots or pawns. In addition to offering their workforce, they enriched local culture with the incorporation of their cultural and culinary traditions.
Economic growth. The expansion of agricultural production with the importation of machines, foreign investment in infrastructure and immigration allowed the increase in the volume of exported raw materials, which favored economic growth and modernization.
Social improvements. Economic transformation favored the demand for labor, access to goods and services in the domestic market and, through the Law of Compulsory Primary Education, the increase in the level of literacy in the population.

Disadvantages of the agro -export model

The main disadvantages of the agro -export model were:

External market dependence. Changes in the economic and political conditions of raw materials buying countries directly affected agro -export economies, as happened during World War I and Great Depression. The agro -export economy entered into crisis when international trade was interrupted, buying countries promoted protectionist policies or the external market of a certain product was saturated or conquered by the production of another country.
Regional imbalance. The regions dedicated to agricultural production were enriched with the agro -export model while other regions, such as the provinces with traditional artisanal industries, were marginalized and impoverished or grew at an unequal pace.
Estate. With the agro -export model, the great landowners and landowners emerged, such as the Argentine stagnations, who concentrated the land and turned their rooms into large companies dedicated to export. This landowner oligarchy was enriched and differentiated socioeconomically from the rest of the population.
Agricultural but non -industrial development. Due to the emphasis placed on the export of raw materials, the growth of the agricultural sector was not accompanied by an equivalent development in the industrial sector. Technical and technological investments and innovations were mainly concentrated on agricultural machinery and infrastructure for the production and transport of agricultural and livestock products.

Examples of the agro -export model

In Central America an export model of tropical fruits was established.

The agro -export model was successful in some countries for a time but entered into crisis in the first third of the twentieth century, especially during the thirties. Some examples of the agro -export model are:

Venezuela. During the nineteenth century, this country was mainly dedicated to the export of agricultural products, such as coffee, cocoa, tobacco and sugar. At the end of the 19th century its oil development began and the beginning of the 20th century replaced the agro -export model with an economy dependent on oil exports.
Central America. He developed throughout the nineteenth century and the first half of the twentieth century an export model of agricultural products, such as indigo, cotton, coffee, cocoa, sugar and banana. In 1899 the American company was founded United Fruit Companywhich was dedicated to controlling the haciendas and transport of tropical export fruits and exerted an important political influence in the region.
Argentina. He organized an agro -export model based mainly on the export of cereals, meat and wool, so it was known as “the world’s barn.” The model was successful for about fifty years, from the first presidency of Julio Argentino Roca initiated in 1880 until the crisis of 1930, with a brief period of decreased export activity during World War I.

See also: Latin America in the twentieth century

End of the agro -export model

The world crisis of the 1930swhich began with the fall of the New York Stock Exchange in 1929, ended the agro -export model of Argentina and other Latin American countries. International trade was affected by the protectionist policies of the countries trying to deal with the crisis and, in this context, the price of raw materials in the external market fell.

References

Barsky, O. & Gelman, J. (2012). History of Argentine agriculture. From the conquest until the beginning of the 21st century. South American.
Hora, R. (2010). Economic History of Argentina in the 19th century. 21st century.
Kuntz Ficker, S. (2019). The first was reconsidered exporting: a revaluation of its contribution to Latin American economies. The College of Mexico.
Luna, F. (1993). Brief history of Argentines. Planet.
Míguez, E. (2008). Economic history of Argentina. From the conquest to the crisis of 1930. South American.