Words of wisdom/
Sergio Rafaelli on Argentina’s pulses market and a life in the industry

Argentina's economy has seen its fair share of ups and downs. How did you manage to remain stable in such an unstable climate?

When I think of everything we’ve been through… at times, it was madness. We have seen so many, often opposing, situations. I think we just ended up normalising the madness… it’s a typical trait of ours! At one time, just before a big crisis, I saw our currency devalue 30% in the time it took me to walk 8 blocks. This was at the time when all the exchange houses had posters outside with the prices on ... it was very shocking.

Things change all the time and that is something that affects the entire globe. Look at shipping: sea freights were always a stable option for Argentina, often cheaper than land freight, and now it’s the complete opposite. We also have to deal with the asymmetries that occur in Argentina when there is a very rapid devaluation process, which then makes exporting companies lower their costs very quickly or when the opposite occurs and the dollar loses twenty, thirty or forty percent in a year against inflation, as is happening currently, and generates a price and cost inflation of forty percent per year in dollars. When we talk about this interest rate in dollars, nobody understands anything ... we try to understand it, even without logic or reason.

At the end of the day, it's about keeping companies going and being profitable, at least at the most basic level, since all of these situations ultimately affect the overall revenue of companies in the industry. You have to live with the market you’re in, even when it doesn’t always allow you to do what you need. 

Tell us about your experiences as President of the Chamber of Pulses. What were the biggest challenges?

I was lucky enough to serve five two-year terms and the first was very challenging because it was the reassembly of a chamber that literally did not exist previously. In short, it was a total re-shuffle and was really a lot of work; we had to rearm the history of the chamber, give it an entity, a presence, credibility and, above all, representativeness. We repealed the permanent elections and changed it so that the positions would last only one year with one possibility of re-election. 

The chamber has always been deeply dedicated to the growth of the pulses sector. Every day presented a new challenge: from organizing one of the best GPC conferences (Bariloche 2002) to fighting for the reduction of retentions. In my last term as president of the chamber, from 2019 to April of this year, we managed to finally get pulses recognized as a regional economy, one of the most important in the Argentine Republic.

We also formed the Argentine Agroindustrial Council (CAA), which brings together almost 100% of the country’s agribusiness sector with the sole purpose of interacting with the public sector to increase production and quality, both to meet the demands of our population and to consolidate Argentina as a responsible and sustainable leader on the global stage.

Can you share some more highlights of your career?

One highlight was definitely when, in the middle of a very deep crisis in Argentina in 2002, through the efforts of José M. Lazara, who at that time was a member of the Executive Committee of the GPC, we were invited to organize the 2002 bi-annual convention in Bariloche. It was a very big challenge for us but we formed a small workgroup and organized it in a dream place: The Llao Lao Hotel in Bariloche, probably one of the most beautiful places in the Argentine Republic. We had to deal with everything that was happening at that time in the country as well as the people who did not want to come to Argentina because of all the disorder and social chaos but, in the end, it was a huge success. I personally believe that this convention set a standard because, from then on, some began to be better than others based on the Argentine experience. Many people still have the memory of those four wonderful days in Bariloche. It took us a year and a half of work but when we saw the result, it was so worth it. It was an incredible experience that I count among my most beautiful memories ... and to think that almost 20 years have passed.

From there, I joined the Executive Committee of the GPC, to which I still belong today, now representing the Pulses Chamber of the Argentine Republic.

I believe that we as a Chamber have worked a lot in all these years; we’re a collegiate body in which everyone participates, regardless of who the president is. From a personal point of view, I have the peace of mind that I have given the chamber a lot of my dedication after more than 30 years of my life participating in the directive committee. I am convinced that the final balance, at least for me, is positive.

How do you see the future of pulse production in Argentina?

I always saw Argentina with enormous potential for the production of pulses but if one analyzes the last twenty years, the growth of the sector was very gradual and almost entirely due to the heavy incorporation of chickpeas, with the development of new varieties and planting areas from 10 years ago. Lately, something similar is starting with peas, for example. We were also working in a difficult context which didn’t exactly favour exponential growth! 

Today, there are more than 100 companies in the world that trade pulses from Argentina. In the domestic market, we’ve incorporated more processing plants and new selection technologies. All this synergy will undoubtedly continue to encourage growth and the players in our industry are looking to diversify, improve productivity and offer new products.

We have seen Canada grow from something much smaller than us when we were already a major export power. Today, Canada is a world leader and we continue to be where we were then. Naturally, there were public policies that allowed Canada to have the growth that it had and others that impeded Argentina’s growth. Even so, private investment, which has always been and still is the basis of the development of the pulses sector in Argentina, never stopped. I think that now, even more than before, it has a very high development potential. Of course, the growth of the plant-based industry and the pandemic are two contributing factors driving people to consume more pulses, too. 

The potential is there; it depends on us. I would like to see us soon reach a million tons of exports. It is not a utopian dream: we have everything we need and so this is the next goal.

Which pulse crops have the most potential in the future?

I have no doubt that the crop which will see the most growth in the coming years is yellow pea, both for protein extraction in the plant-based meat and dairy industry and for pulse flours. 

I also think we will also go back to producing large volumes of chickpeas which, due to lack of competition, have been declining but now the market is indicating an increase in popularity. I also see gradual growth in all the other pulse types. It will definitely be an attractive sector in the coming years.

Has there been an increase in the consumption of black beans with Venezuelan immigration?

 It is difficult to measure the increase in consumption in the domestic market in Argentina, firstly because there are no statistics and also because there are some more informal markets. However, the consumption of pulses has definitely increased in Argentina. In the case of black beans, I can confidently assert that consumption has increased along with the increase of Venezuelan immigration. It’s natural that they maintain their habits and customs - which are, incidentally, very healthy - because I imagine that uprooting from your country must be too painful not to at least allow yourself to maintain those habits that make you feel a little closer to your roots.

Do you think that feeding the population has to do with the public policies of each government?

In decentralized countries, I would say that food consumption trends are less dependent on public policies and instead are linked to the conviction of food uses and customs. In these societies, the media and social networks are much more influential in terms of people deciding what they want to eat and why. 

In economies where food consumption is in some way planned by the government, things are very different: the cost/protein value/transport and logistics/maintenance equation weighs heavily and, as a result, pulses have a huge advantage over almost any other alternative. In fact, in international food aid, pulses are one of the most important variables on food tenders. We’ve even seen it here in Argentina: the national government has incorporated pulses into the distribution of food for the neediest areas. In this case, the public-private interaction is essential to ensure that the demand is there for products that are produced in the country and there is enough stock to keep everyone fed and prices low.

What public and private sector agreements exist to guarantee that Argentines have access to a more complete diet?

At the Chamber, we have been in continuous dialogue with the government and we even suggested which pulses should be included in tenders during the pandemic to avoid running out of imported products, as we saw in the beginning of the pandemic. For example, we advised the reduction of lentil tenders (which were imported at that time) and that emphasis be placed instead on products with significant domestic stocks, such as chickpeas or beans. It is important that we all collaborate on the private side to make the public sector more efficient. I also believe that in the future we should really promote pre-cooked pulses and flours as they are an attractive and easy way to get people to consume more pulses.

In your opinion, where do we have to look to understand what the future of pulses in Latin America holds?

I believe that Brazil will achieve self-sufficiency and will increasingly be a supplier of pulses to the world. We’ll also see a growth in consumption in neighbouring countries, for example Chile has been an exceptionally important case in recent years and, to a lesser extent, Uruguay.

The new realities of ocean freight will also bring us closer to some markets and remove others. It is a complex issue that is very difficult to predict and it will not begin to be resolved until well into next year.

The current crisis feels like an amalgamation of crises; how do you consider it from a historical perspective?

In my opinion, all crises are different; they perhaps all have similar origins but the developments and outcomes are always different. We always think that the one we are experiencing is the worst thing that can ever happen and then some years pass and something even worse comes along. It always happens when the government, in the name of urgency, spends more than they earn and, when that’s not enough, they always try to increase the tax burden against the same sector of the population. So crises are an endless loop and they will continue to be - it doesn't seem like we've learned any lessons.

In our country, agribusiness is the sector that contributes the most dollars to the state and yet we continually see opposition from public opinion, the government and the media, who, whether from a philosophical or a political standpoint, refuse to accept this reality. I am convinced that agribusiness is Argentina's way out of the permanent cycle of crises. 

How important are social actions at times like this?

 I have a very clear opinion about this: social actions are always necessary. There is always a part of the population that is more disadvantaged than the rest, particularly in countries with more precarious economies, like ours. Everyone - us in the pulses Chamber and those working in the industry - is very aware of and committed to social assistance. We’ve worked with provincial and municipal governments to arrive at an agreement with the National Food Bank, which takes donations from our partners and sends them where they are most needed. Many people are suffering now as a result of the pandemic, but there have always been lots of people in difficult situations. It is unquestionably more serious right now but even when it was less so, it was just as serious for those who did not have the possibility to feed themselves adequately.

Another of our concerns in the chamber has been to train cooks from popular restaurants to work with pulses and teach them the benefits of their consumption. The goal is to make them more attractive and easier to use and take advantage of pulses as the phenomenal source of protein that they are.