Argentina’s ‘king of soya’ wears his crown reluctantly. Gustavo Grobocopatel winces at the mention of his nickname, dismissing it as just the result of people ‘putting a face’ on a story — in this case, Argentina’s remarkable rebound from its economic collapse in 2001, powered by its booming soya industry.

“I’m not the only one who was doing what I was doing, I didn’t invent anything. It’s unfair the position I occupy,” says one of Argentina’s most influential business leaders and a pioneer of its soya industry, which took off in the 1990s to become the third-biggest exporter of the beans in the world after Brazil and the US, and the top exporter of soybean oil.

Mr Grobocopatel’s innovative management practices are the subject of business school studies, including Harvard — he remains down to earth. He recalls that his own studies were not at all promising: “When I graduated as an agricultural engineer I was told I had no future, but it turned out to be a blessing.”

Indeed, Mr Grobocopatel was able to apply his knowledge to Los Grobo, the family business which his father Adolfo founded in 1984, the same year he graduated. The young Gustavo suggested planting soya and set about modernising the company. Before long they were among the first in Argentina to adopt the most advanced techniques being pioneered in the US, such as no-till farming and transgenic seeds, and so revolutionised productivity.

Within three decades, he had transformed the company from a small-time family business with scarcely a thousand hectares of agricultural land to an international operation, which remains privately owned, farming up to 350,000 hectares with revenues of more than $1bn. It had become one of Latin America’s largest producers of grains, also including wheat and maize.

Lately, though, Los Grobo has been gradually cutting back its grains production, after making a ‘tactical, not strategic’ exit from Brazil, and today farms 50,000 hectares in Argentina, compared with 120,000 hectares three years ago. That is partly because farmers’ profits in Argentina have been obliterated by taxes and trade restrictions implemented by the government of President Cristina Fernández, as well as runaway inflation, while commodity prices have tumbled.

Mr Grobocopatel bats away fears of the end of the commodity boom.“Price is not synonymous with boom,” he says confidently. “Every day there is greater demand for grains. What happens is that there are temporary decouplings which make prices rise or fall, but for me the boom continues.”

As optimistic as ever about the prospects for Argentina’s powerful and advanced agricultural sector, Mr Grobocopatel says he is simply preparing for the future. Arguing that technology will become more central to agriculture, he says Los Grobo is shifting its focus from growing soya to providing services, especially biotechnology and precision planting.

“We are just at the beginning of technological changes of great magnitude,” assures Mr Grobocopatel.

He is convinced that Argentina’s vibrant and entrepreneurial farming sector is perfectly positioned to be at the vanguard of a ‘new green industrial revolution’, as developments in 3D printing, nanotechnology, robotics, communications and artificial life converge. More traditional farming powerhouses like the US are too protected and inflexible, he says, while European farmers are ‘so subsidised that they are almost like gardeners; it doesn’t matter if they produce more or less’.

Leaning across the table, eyes narrowing, Mr Grobocopatel then launches into an impassioned speech on his vision of the future of farming, in which he believes we are going to have to think of plants as factories, which can produce energy, bioplastics, enzymes, even molecules. “A plant is a factory without a chimney, it doesn’t emit carbon dioxide but it consumes it; it is a factory that uses the light of the sun, or renewable energy; it is a factory which is in the countryside, reversing migration to cities back to the countryside; it is a clean factory that resolves problems of food security, the environment, geopolitics and rural poverty.”

With that in mind, Mr Grobocopatel is preparing to launch a precision planting project called Frontec, a joint venture with a state-owned satellite company. By using satellite imagery to determine soil quality and yields, he thinks he can help farmers boost their operating profit about 30pc by optimising the density of seeds planted, and the amount of fertiliser used.

He thinks it will revolutionise agriculture: “This technology is to agriculture what the microscope was to medicine.”

Los Grobo’s diversification has been enabled by its flexible business model, renting much of the land it farms and outsourcing labour and machinery. Although agricultural land in Latin America has been one of the hottest hedge fund and private equity plays in recent years, Mr Grobocopatel says this strategy has helped his company to adapt to the diverse risks it faces, from the climate, to politics and prices.

And in the long term, he believes that the technological expertise in which he is investing is going to be worth more than land anyway.

“The difference between rich and poor is not going to be determined by capital but by knowledge, and the flow of that knowledge,” he says. “The closer you are to the technological and knowledge revolution, the greater your ability to capture value . . . and I believe that sooner or later the market will copy that.”

A philosopher-farmer who has intrigued academia

David Bell, a professor of agriculture and business at Harvard Business School, says there is ‘tremendous potential’ to make farming more efficient.”

“Gustavo is doing interesting things. Farming is a slow-changing industry, and he is a fast-changing guy,” says Professor Bell, author of a case study called “Los Grobo: Farming’s Future?”.

Los Grobo does more than just work the land. With a huge network of third-party providers making the company uniquely asset-light, it spans a broad range of functions, including logistics, risk management, financing and technology transfer. Instead of investing in land or machinery, Los Grobo reinvested most of its profits into human resources and IT.

Published in Dawn, Economic & Business, April 27th, 2015

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