Price boom is mixed blessing in farm nations

By Helen Popper

PERGAMINO, Argentina (Reuters) - Sometimes called "green gold" of the Pampas, soybeans have brought new prosperity to the Argentine countryside, but with that prosperity comes controversy over how to share the bounty of high global prices.

The town of Pergamino is nestled among some of the world's most fertile commercial farmland, and residents credit the current boom in soybean prices for new high-rise buildings, record car sales and a bustling main street filled with chain stores.

"The town's made a comeback," said real estate agent Luis Battaglino, adding that prime farmland prices have risen by 10 percent per year since 2002. It now sells for as much as $15,000 per hectare ($6,000 per acre) -- comparable to prices in the U.S. farm belt.

"They call this area the golden triangle of the Pampas," he added. "Even at these prices, there's nothing on sale because everyone thinks grain prices will keep on rising."

Strong demand for Argentina's farm exports has helped Latin America's No. 3 economy recover some of its former glory as a breadbasket for the world, fueling Chinese levels of growth and swelling state coffers through export taxes on grains.

In the famous Pampas plains, many credit farmers with lifting the country out of the doldrums after an acute crisis in 2001-02 that followed a long slump in the farming industry partly due to dollar-peso parity that made exports expensive.

"It was farming that brought the country back to life,", said Jorge Solmi, director of the Agrarian Federation (FAA), which led a recent three-week farm strike against a tax hike on soy exports. "When the country was in ruins, all the money for the social welfare plans came from the countryside."

POVERTY