BUENOS AIRES (Reuters) – Argentina’s government announced the approval of a $394 million loan for irrigation projects, officials said in a statement on Friday, following steep farm losses from a historic drought that has deepened an already severe economic crisis in the country.
The approved loan is part of irrigation development plan that aims to ultimately invest some $2.07 billion in public spending and nearly double the amount of farmland with irrigation systems in place.
The South American nation is a top global exporter of processed soybeans, as well as a major corn and wheat supplier.
Argentina’s economy, South America’s second biggest, is especially dependent on its massive agricultural sector, which in turn is a major source of hard currency needed to pay off debt and finance many imports.
Due to devastating drought conditions last year and earlier this year, Argentina’s 2022/2023 soybean and corn crops will likely end the season with only half the output harvested during the previous cycle, according to the latest forecast from the Buenos Aires grains exchange.
The government’s irrigation plan “will allow the development of the country’s productive potential” by adding 1.9 million hectares (4.7 million acres) to its total irrigated areas, said Jorge Neme, the country’s development planning secretary.
Argentina currently boasts around 2.1 million hectares of irrigated farmland, said Neme in the economy ministry statement.
Over 30 irrigation projects are already underway in the country’s trio of top agricultural provinces Buenos Aires, Santa Fe and Cordoba, which have seen the worst drought impacts.
The irrigation projects will be financed by local funds, as well as multilateral organizations including the World Bank, the Inter-American Development Bank and the Development Bank of Latin America, according to the statement.
(Reporting by Maximilian Heath; Editing by David Alire Garcia and Bill Berkrot)
