The record food prices seen thus far this year have had massive and broad-sweeping effects. Biofuel production from food crops, thought to be responsible for anywhere between two percent and 30 percent price spikes, has trickled off, in favor of cellulosic and algal-based fuel solutions. In less stable regions of the world, rioting and other forms of political instability have become widespread, and millions of dollars in aid has been pledged to help alleviate the crisis. 

But in other parts of the world, where cash crop agriculture is integral to the economy, the soaring fuel prices have triggered something of an economic boom. And nowhere has this boom been more pronounced than Argentina, one of the world’s largest soybean producers. But if the gains from this boom are not properly reinvested, the country could just as quickly find itself in a crash as precipitous as its rise was meteoric.

With applications ranging from biofuels to seasonings to protein food bases products, soybean demand has brought on record prices—currently $660 a ton. As you might expect, this has spurred many Argentinean farmers to dedicate more land to soy, and less to other traditional staples such as corn crops, fruit groves, and cattle cultivation. This trend toward monoculture brings on risks both economic, such as recession in the face of a price drop, and biological; a blight.

Though the use of soy strains genetically engineered to resist the herbicide glyphosphate had initially been thought to reduce the risk of biological threats to the soy crop, instead, overuse of the fertilizer has resulted in outbreaks of glyphosphate-resistant weeds, while polluting the groundwater, and weakening nutrient-poor soils in some areas of the country.  Making a bad situation worse, some farmers are clearing rainforest to create more arable land for the lucrative crop. Not only does this create land-use-change global warming, but it also contributes to a number of secondary issues, such as erosion and loss of biodiversity.

If the fruits of today’s current soy boom are contribute to Argentina’s long-term economic future, some of the profits must be reinvested into the agricultural infrastructure to ensure lasting productivity. A moderate windfall tax on soybean crops could fund a subsidy to incentivize  farmers in other markets to continue production of non-soy crops. Requirements that large-scale soy operations employ local labor, rather than displacing already impoverished farmers with increased mechanization, could reduce the spread of poverty and the release of greenhouse gases.

Most importantly, agricultural education and government oversight at the most local level could help prevent excessive herbicide use and deforestation, ensuring the long-term viability of farmlands, regardless of fluctuations in commodity exchange prices.  Though these measures would all reduce capital gains from the soy boom in the short term, the ecologically and economically sustainable level of growth they foster will not only reduce the damage a boom-and-bust cycle might have on a developing nation like Argentina, but also establish a model for future earth-friendly development in agriculturally based economies worldwide.

Photo by Flickr user Luis Argerich