TED Case Studies
CASE NUMBER: 464
CASE MNEMONIC: URUGUAY
CASE NAME: Uruguay Rice Exports and the Environment
I. Identification
1. The Issue
Uruguay's economy now depends on
exports, and the agricultural sector alone contributes 11% of the total GDP (1).
Rice is the third most important agricultural export. Rice, however, requires
increasing usage of land for its production that leads to direct as well as
indirect environmental deterioration. While not all the rice is grown in
wetlands, most of the water that is utilized for irrigation of the rice fields
is redirected away from rivers or marshlands in the areas. This has changed the
biodiversity of the country. Uruguay's richest biodiversity is found in the
wetlands and the growing practices of rice production has introduced a major
threat to certain species that depend on this ecosystems to survive. While not
all the species have been threatened, their numbers and lifestyles have been
affected at different levels. The continuation of rice production, upon which
the economy of Uruguay rests, is a threat for the future of country's
biodiversity.
2. Description
Uruguay is one of the smallest countries in South America, covering a total area
of 170,000 square kilometers (2). After a dictatorship that ended in 1980,
Uruguay found itself rewriting its constitution to have a democratic system.
Among other changes in the country, Uruguay has increased its development under
a similar economic growth paradigm during and after the military government of
1973. During 1973 and 1977, the military government under rule in Uruguay
offered the Plan Nacional de Desarrollo which permitted market forces to operate
more freely than previously, with the means to expand and diversify trade (3).
Uruguay further expanded their free trade orientation when it signed to be a
member of MERCOSUR in 1995. "MERCOSUR is a trading arrangement set up by
Argentina, Brazil, Paraguay, Uruguay, and Chile that allows goods to be traded
among the four partners."(4) Uruguay now continues to expand their free market
economy to create the conditions for sustainable economic growth, leading to the
improvement in the living standards of the population (5). The recent economic
policy targets to reduce the rate of inflation, increase exports, promote growth
and employment, restore fiscal balance, and service external debt without
sacrificing investment needS (6).
Uruguay's agricultural exports
contribute 11% the total GDP, "however, the real impact of this group is far
greater than this percentage as it provides most of the raw materials for the
industrial sector which employs 16% of the local workforce."(7) Among the main
exports rice is the third most important. The total amount of land used per year
for rice cultivation is a total of 140,000 hectares and about 70% of this land
is found in the eastern sector of the country (8). Of the total production of
rice, 88% is exported and the rest is consumed at the domestic level (See Table
I)(9). While the cultivation of rice began in flat and well drained areas, over
the years and as a response to the increasing demand by foreign countries, there
has been an artificial drainage of natural marshes and even the usage of sloping
land areas to grow the rice (in the 1990s) (10). The first innovation in rice
production occurred in the 70's and the latter in the 90's. These later practices
have introduced great environmental degradation factors in the wetlands located
in Uruguay. The major threat is that the wetland areas, in particular those
located in the East (the Eastern Marshlands), are among the most important
natural ecosystems in Uruguay. "They support a high vertebrate and invertebrate
diversity, including 35% of the freshwater fish species, 47% of amphibians, 58%
of reptiles, 42% of birds and 51% of the mammals in Uruguay."(11)
Table I
Uruguay Rice Production, Selected Years
1982/83 1985/86 1989/90 1991/92
Hectares 69,937 85,749 82,522 127,268
Producers 283 429 528 783
Source: "Rice in Uruguay", Statistical Report 1995, Statistics Sub Commission of
the Rice Sector Commission.
Due to the threats presented by the practices of artificial irrigation drawn from
marshes to maintain the production of rice, the government assumed some
environmental commitments to protect the natural ecosystems when it signed the
RAMSAR convention in 1984. This treaty makes countries responsible for
assigning a wetland area in their country for conservation purposes, and this
should include the preservation of that area by keeping human intervention to a
minimum or nullifying it. Uruguay assigned part of the Lake Mer¡n Basin as the
area protected under the conditions of the Ramsar convention. During the 1970s,
under military rule, Uruguay lacked involvement on environmental issues at the
governmental level. Yet, Uruguay is a member of the Convention on Biological
Diversity signed in 1992 at the Earth Summit in Rio, Brazil. Uruguay is aware
of the necessity of conserving their biodiversity, and therefore the importance
in maintaining their ecosystems intact, which means that wetland conservation
becomes a keen issue since it provides a home to most of the biodiversity of the
country. However, the economic policy and the demand of rice by foreign
countries makes the conservation of these areas a difficult one to maintain.
Among the effects that rice cultivation has on the environment are (a) the
extinction of animal and plant species; (b) the accumulation of hull; (c) soil
erosion; and (d) a decrease in total wetland areas.
The main and most noticeable
environmental impact is the replacement of natural habitats. The replacement of
these areas, into rice croplands, has caused the extinction of animal and plant
species. The reduction of the wetland areas as a result of irrigation for rice
crops has also created some changes in the natural habitat belonging to the
marshlands. The numerous organisms native and migratory to these ecosystems are
affected at different levels. Plants and animals are becoming extinct as a
result of an increase in the competition for survival and some plant species have
become extinct due to their direct replacement for rice crops. In 1996, a total
of 11 plant species were listed under the list of threatened species (12).
The survival of some species, especially in the animal kingdom, depends on their
capability in adapting to the human made ecosystem, the rice croplands. Other
environmental effects due to the rice industry is the accumulation of hull
created by rice processing. Uruguay has already developed projects that are
aimed to improving this situation by improving the utilization of the residue and
reducing the impact caused by its accumulation. A future environmental problem
that may be seen is the creation of soil erosion due to the increase in
cultivating rice in sloping areas. As for today this problem is minimized so its
effect is only a speculation (13). With the increase in rice trade, more
marshlands are being used as the major bodies of water for irrigation. The large
amounts of water drained from these areas has resulted in a decrease of the land
area that these ecosystems cover. In other words, the marshlands are decreasing
in total area and this is causing distress of ecosystems where species'
competition for survival has increased.
3. Related Cases
JAPRICE Case
KENPEST Case
MEXPEST Case
VIETWOOD Case
THAILOG Case
LATTECH Case
BRAZIL Case
KORRICE Case
HIDROVIA Case
PATANAL Case
YACYRETA Case
HIDROVIA Case
PATANAL Case
4. Draft Author: Helena Olivas, August,1997
II. Legal Clusters
5. Discourse and Status: AGReement and INPROGress
The government has taken important steps in dealing with the issue of wetland
protection and its biodiversity. As mentioned above, Uruguay became a member
of the Ramsar Convention in 1984 and of the Convention on Biological Diversity
in 1992. There also exists a law that deals directly with the conservation of
wetland, this law is Law 16.170 which holds MVOTMA with the responsibility to
make sure that the areas assigned for conservation are respected by the rice
farmers, and others. Uruguay finds it important to be considered a country that
values the natural(14). While the country has recognized the importance of
protecting its biodiversity, it recognizes that this is not only an ethical
issue but one that deals directly with the economy. In other words, the
government in Uruguay, as stated by the ministry of agriculture, claims that the
environment presents an ethical and practical matter. "To make sure that the
world sees Uruguay as a 'natural' country is the key to its prosperity."(15)
Developed countries are increasingly concerned in acquiring natural products.
If Uruguay changes its rice cultivation practices to be more environmentally
friendly, the prices of this product will increase since the product will be
purchased by a more elite group of consumers.
6. Forum and Scope: URUGUAY and REGIONal
Uruguay is a contracting party of two major international environmental
conventions: the Ramsar Convention and the Convention on Biological Diversity.
Both of these conventions deal directly with biodiversity loss.
7. Decision Breadth: UNILATERAL (1)
8. Legal Standing: TREATY
III. Geographic Clusters
9. Geographic Locations
a. Geographic Domain: South America
b. Geographic Site: ATLANTIC
c. Geographic Impact: Uruguay
10. Sub-National Factors:
11. Type of Habitat: TEMPerate
IV. Trade Clusters
12. Type of Measure: Regulatory STANDARD
13. Direct v. Indirect Impacts: INDirect
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product: YES; Water
b. Indirectly Related to Product: YES; Fertilizers
c. Not Related to Product: NO
d. Related to Process: YES; Habitat Loss
15. Trade Product Identification: Rice
16. Economic Data
Due to the increase in the demand of rice, Uruguay has increased their rice
production by about a 1% per year. In 1987, the total production of rice was of
4,225 kg/Ha (16); by 1993 the total amount of rice yield increased to 5,556 kg/Ha
(17). This contribution has increased the amount of rice that is exported to
other countries. The increase in productivity has resulted in an increase in
demand for this product by other countries. "Rice varieties planted in Uruguay
are mostly of the American long fine type, which secure the best prices on the
international market. Until the mid-eighties, Bluebelle was the predominant
variety. However, "the 'El Paso 144' subtropical variety has become more
widespread since 1986, and exceeded 50% of the total crop in the last two
harvests, because of its good output, especially in the North."(18) Uruguay
exports high quality medium and long grains, therefore it is able to command
higher prices than the grain sold by Asian producers. Consumers of this product
are often medium to upper class income consumers. The major importers of this
product are Brazil, which is the second largest importer of rice in the world
after Indonesia, Peru, and Senegal. These can be seen in Table II.
Table II
Uruguay Rice Exports by Destination
Country Metric Tons Percentage
(000's)
Brazil 343,080 64.7
Peru 72,228 13.8
Senegal 50,898 9.6
Iran 39,562 7.4
Chile 10,734 2.0
Mexico 3,350 0.6
Source: Rice Sector Commission, El Pais Agropecuario, No. 15:17, 1996
17. Impact of Trade Restriction: LOW
18. Industry Sector:
The capital for the rice industry is originated in Uruguay, and there is no
foreign investment in the mills. Many of the companies started as cooperatives
of producers that later grew into commercial companies. In Uruguay , at present,
the processing and the marketing activities related to the production of rice,
are carried out by large corporations native to the country. Four major
companies in the country carry out 85% of these activities, and the largest
company exports 51% of the total national production (19).
19. Exporters and Importers: Uruguay and MANY
V. Environment Clusters
20. Environmental Problem Type: BIODIV
The problem of biodiversity loss in Uruguay
is directly related to its cultivation of rice. Much of the land used for the
production of rice uses the marshlands as their major source of water. Farmers
use the water of these ecosystems for irrigation and less frequently the
marshlands are directly replaced with rice croplands. Between the years 1981-82,
6% of the total cropland in the country was irrigated, by the years 1991-93 10%
of the total cropland was irrigated (20). An increase in the amount of irrigated
land has created a decrease in the total existing marshland area. This has
directly affected native and migratory birds that fly between the North and the
South, in a negative way. These birds along with other animal and plant species
find themselves in danger when their natural ecosystems decrease in total area,
and when they are replaced for rice fields. This does not affect all species
to the same degree, however, it does place some species in the endangered list.
In Uruguay there exist a total of 365 bird species, and nine of those species
are presently listed as endangered (21).
21. Name, Type, and Diversity of Species
Here is a list of bird species that are threatened in Uruguay.
Xolmis dominicana
Sporophila palustris
Agelaius flavus
Rhea americana
Heteronetta atricapilla
Spartonoica maluroides
Limnornis rectirostris
22. Resource Impact and Effect: LOW and Scale
23. Urgency of Problem: LOW
24. Substitutes:
The rice industry creates accumulation of hull created by the processing of
rice. However, Uruguay has already developed projects that are aimed to improve
this situation by bettering the utilization of that residue and reducing the
impact caused by its accumulation.
VI. Other Factors
25. Culture: NO
26. Trans-Boundary Issues: YES
Some of the birds that are listed as threatened species, are migratory birds
that travel to the marshlands as a means of carrying out reproduction
activities. This presents a problem for those birds that may travel from North
to the South to reproduce and find themselves without the required environment
for successful reproduction. Therefore a reduction in the total land area of
marshlands in Uruguay or degradation of their environment presents a threat to
native bird species as well as migratory bird species. This ultimately creating
a loss of biodiversity in other parts of the world.
27. Human Rights: NO
28. Relevant Literature
Arballo, E. 1990. "Nuevos registros para avifauna uruguaya". Ovenbird 13:
179-189.
"Arroz" (Rice), Official Publication of the Rice Planters' Association, June
1989, April 1998, June 1995, September 1995.
Batello, C., P. Blanco and A. Lavecchia, "El arroz en el Norte" (Rice in the
North), 6th National Congress of Agronomic Engineering.
Beazley, Mitchell. Wetlands in Danger: World Conservation Atlas. IUCN-The World
Conservation Union.
Blanco, F., A. Roel, "Riego en el cultivo de arroz" (Irrigation in Rice
Cultivation), 4th National Congress of Agrnomic Engineering.
Collar, N. J., M. J. Crosby & A. J. Stattersfield. 1994. Birds to Watch 2: The
World List of Threatened Birds. Cambridge: Birdlife International. P.320.
Cuello, J.P. 1985. Reference List and Bibliography of Uruguayan Birds. D. A.
Larra¤aga Mus., Municipality of Montevideo, Montevideo. P116
Evia, Gerardo. Rice Cultivation in Uruguay: Agricultural Production Activities.
Social Ecology Studies 4: 3-15, 1996.
Finch, M.H.J. A Political Economy of Uruguay Since 1870. St. Martin's Press, New
York 1981.
Green, Paula L. Journal of Commerce October 3, 1996. Foreign trade. Lexus/Nexus.
Gudynas, Eduardo. Rice Exports and Conservation of the Eastern Marshlands. Social
Ecology Studies 4: 28-40, 1996.
Herzig, M. 1993. "Ba¤ados del Este y Franja Costera", Uruguay. Procedimiento de
Monitoreo. Ramsar Convention, Gland INIA, "Arroz: Resultados experimentales
1993-1994". National Institute for Agricultural and Cattle Raising Research,
Eastern Experimental Station.
Lagomarsino, F., J. P. Konrad & R. Vaz-Ferreira. 1986. "Problematica de los
ba¤ados de la zona este de Uruguay". Eco Bulletin No. 17: 2-13. Franciscan and
Ecological Center, Montevideo.
Lagomarsino, F., C. Rodriguez, J. Rudolf, R. Spinola & F. Rilla. 1988. "Area
Ramsar del Uruguay: Desarrollo o destruccion?". MedioAmbiente 9(1): 63-77
Malta, C. 1995. "Arroz Uruguayo para brasile¤os". Gazeta Mercantil 55, 31
December 94-2 January 95.
Mendez, 1996. "La residualidad de plaguicidas utilizados en el cultivo de arroz".
El pais Agropecuario No. 15: 23-26.
Perez Arrarte, C. 1996. "Grupo de trabajo Medianeros y sistemas arroceros".
Arroz, ACA publications, 5: 28-30 Scarlato, G., 1993. "Gestion Ambiental de los
humedales de la cuenca del Lago Merin. Un panorama sobre los conflictos y las
respuestas". CIEDUR, Documents and Works Series. No.84. Sectoral Rice
Commission, şArroz en el Uruguayş (Rice in Uruguay), a publication of the
Statistics Sub-Commission, Sectoral Rice Commission, Montevideo.
SELA [Latin American Economic System]/UNCTAD. 1995. "Comercio y medio ambiente.
El debate internacional". New Society, Caracas.
Seragro, 1994. "Mesa Redonda Variedades del Arroz. El Mercado Agropecuario,
Seragro, No. 205.
Tomasino, H., 1995. "No se cubren costos: resultado economico del cultivo del
arroz en el ciclo 1994/1995", Arroz 3:4-11. Umpierre M., Torre, A. Torres, M.,
Yorio, S., Deambrosi, E., A. Lavecchia and J. Zorrilla de San Martin, G. "Arroz,
la tecnologia y el desarrollo sectoral". Seragro, 1994. Vaz Ferreira, R. 1986.
Uruguay, pp. 280-291. "Inventario de Humedales de la Region Neotropical". IWRB
and IUCN, Cambridge.
Wilkie, James W. Statistical Abstract of Latin America Volume 30 Part 2. UCLA
Latin America Center Publications, Los Angeles, California, 1993.
Wilkie, James W. Statistical Abstract of Latin America Volume 31 Part 2. UCLA
Latin America Center Publications Los Angeles California, 1995.
World Resources 1996-97. World Resources Publications, Washington DC, 1997.
Zibechi, A. 1996. "Movimiento independista". El Pais Agropecuario No. 15:17.
Web sites:
Http://embassy.org/uruguay/econ/emies.html
Http://www.unicc.org/uruguay/ury/tpmon/uruguay.htm
Http://www.ncf.carleto.ca/ip/government/embassies/south.am/uruguay/ economy
Http://www.chasque.apc.org/dgsa/PAISNA.HTM
FOOTNOTES
(1) Http://embassy.org/uruguay/econ/emies.html
(2) Http://www.unicc.org/uruguay/ury/tpmon/uruguay.htm
(3) Finch, M.H.J. A Political Economy of Uruguay Since 1870. St. Martin's Press,
New York 1981; p. 253.
(4) Green, Paula L. Journal of Commerce October 3, 1996. Foreign trade.
Lexus/Nexus; p. 5A.
(5) Http://www.ncf.carleto.ca/ip/government/embassies/south.am/uruguay/economy
(6) Http://www.ncf.carleto.ca/ip/government/embassies/south.am/uruguay/economy
(7) Http://embassy.org/uruguay/econ/emies.html
(8) Evia, Gerardo. Rice Cultivation in Uruguay: Agricultural Production
Activities. Social Ecology Studies 4: 3-15, 1996; p. 4.
(9) Evia, Gerardo. Rice Cultivation in Uruguay: Agricultural Production
Activities. Social Ecology Studies 4: 3-15, 1996; p. 13. (10) Evia, Gerardo. Rice
Cultivation in Uruguay: Agricultural Production Activities. Social Ecology
Studies 4: 3-15, 1996; p. 5. (11) Beazley, Mitchell. Wetlands in Danger: World
Conservation Atlas. IUCN-The World Conservation Union; p.92.
(12) World Resources 1996-97. World Resources Publications, Washington DC, 1997;
p.265.
(13) Evia, Gerardo. Rice Cultivation in Uruguay: Agricultural Production
Activities. Social Ecology Studies 4: 3-15, 1996; p. 14. (14)
Http://www.chasque.apc.org/dgsa/PAISNA.HTM
(15) Http://www.chasque.apc.org/dgsa/PAISNA.HTM
(16) Wilkie, James W. Statistical Abstract of Latin America Volume 30, Part 2.
UCLA Latin America Center Publications Los Angeles, California, 1993; p.718.
(16) Wilkie, James W. Statistical Abstract of Latin America Volume 31 Part 2.
(17) UCLA Latin America Center Publications Los Angeles California, 1995; p.614.
(18) Evia, Gerardo. Rice Cultivation in Uruguay: Agricultural Production
Activities. Social Ecology Studies 4: 3-15, 1996; p.9.
(19) Gudynas, Eduardo. Rice Exports and Conservation of the Eastern Marshlands.
Social Ecology Studies 4: 28-40, 1996; p.33.
(20) World Resources 1996-97. World Resources Publications, Washington DC, 1997;
p.239.
(21) World Resources 1996-97. World Resources Publications, Washington DC, 1997;
p.265.
