VZCZCXYZ0002
RR RUEHWEB

DE RUEHBU #0369/01 0461707
ZNR UUUUU ZZH
R 151707Z FEB 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3486
INFO RUEHAC/AMEMBASSY ASUNCION 5340
RUEHBR/AMEMBASSY BRASILIA 5124
RUEHLP/AMEMBASSY LA PAZ FEB MONTEVIDEO 5316
RUEHMO/AMEMBASSY MOSCOW 0730
RUEHSG/AMEMBASSY SANTIAGO 4940
RUEHTV/AMEMBASSY TEL AVIV 0066
RUEHRI/AMCONSUL RIO DE JANEIRO 1871
RUEHSO/AMCONSUL SAO PAULO 2765
RUEHRC/USDA FAS WASHDC 2081

UNCLAS BUENOS AIRES 000369 
 
SIPDIS 
 
SIPDIS 
 
FOR WHA/BSC AND EB/ABT 
USDA FOR FAS/CMP HOWARD WETZEL, APHIS/DEHAVEN 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD ECON AR
SUBJECT: FOOT-AND-MOUTH DISEASE HITS ARGENTINA AGAIN 
 
REF: BUENOS AIRES 00333 AND PREVIOUS 
 
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Summary 
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¶1.  Argentina has recently confirmed an outbreak of 
foot-and-mouth disease (FMD).  Seventy animals on one ranch 
in the northeastern province of Corrientes were diagnosed 
with the disease.  Argentina's National Service for Agrifood 
Quality (SENASA) subsequently destroyed the entire herd of 
approximately 3,000 animals as a preventive measure.  SENASA 
appears to have acted quickly and transparently in dealing 
with the outbreak.  Eight countries to date, including some 
of Argentina's biggest beef export markets, have announced 
restrictions on Argentine beef.  The resultant economic 
losses are difficult to calculate, but could be significant. 
This outbreak underscores the Southern Cone's vulnerability 
to this disease and the imperative for Mercosur countries to 
implement an effective, carefully monitored regional FMD 
eradication program.  A silver lining for the Government of 
Argentina (GOA) is that the curtailment of exports might help 
reduce inflation in the price of beef sold domestically, a 
major GOA concern.  End Summary. 
 
------------ 
The Outbreak 
------------ 
 
¶2.  An outbreak of FMD was detected in the northeastern 
province of Corrientes the week of February 6.  SENASA 
confirmed the diagnosis in approximately 70 animals on one 
ranch; all 3,000 cattle on that ranch were subsequently 
destroyed and disposed of.  The ranch's veterinarian, who 
reported the outbreak to Argentine authorities, said that the 
infected animals had been domestically bred and properly 
vaccinated against the disease.  However, SENASA officials 
speculated that the outbreak was a product of contraband 
cattle that had been smuggled into the country (presumably 
across the Parana River separating Argentina from Paraguay). 
 
-------------------------- 
Argentina's Rapid Response 
-------------------------- 
 
¶3.  SENASA President Jorge Amaya declared the outbreak a 
"national emergency" and oversaw the implementation of a raft 
of control and surveillance measures.  The disease was 
confirmed February 7.  By then, Amaya had already notified 
President Kirchner, sent epidemiologists to the scene, halted 
the movement of animals within the affected area, posted 
relevant information on SENASA's website (updated daily), and 
contacted his counterparts in neighboring countries and other 
major trading partners with the news.  Amaya also held a 
detailed briefing for the diplomatic community in Buenos 
Aires February 13, and invited representatives from embassies 
to visit the site of the outbreak so that they could form 
firsthand impressions of the GOA's response. 
 
------------------------------------------ 
SENASA's Response Bolsters its Credibility 
------------------------------------------ 
 
¶4.  The speed with which SENASA diagnosed and publicized the 
outbreak stands in sharp contrast to its reactions to a 
similar situation near the border with Paraguay in 2001, 
which earned the agency an international reputation for 
opacity.  At that time, SENASA repeatedly mischaracterized a 
major FMD outbreak to USG and other officials, an approach 
that eventually led more than sixty countries to prohibit the 
importation of Argentine fresh beef.  Argentina was just 
beginning to overcome that incident when another, smaller 
outbreak hit in northern Argentina near the Bolivian border 
in 2003.  SENASA's response to that outbreak was criticized 
as well, as many observers felt that the agency acted more 
slowly than it could have in confirming the presence of 
disease. 
 
------------------- 
The Economic Impact 
------------------- 
 
¶5.  Although Argentina has yet to fully recover from the 
economic effects of those earlier bouts with foot-and-mouth 
(e.g. large importers like the U.S. and Canada still impose 
restrictions on Argentine beef), beef exports have taken off 
over the past several years.  According to Argentine 
statistical agency INDEC, total exports of beef and its 
byproducts were valued at USD 735 million in 2003, USD 1.23 
billion in 2004, and 1.65 billion in 2005.  The outbreak 
poses a threat to those gains, although at this early stage 
it is difficult to tell to what extent.  SENASA believes it 
has contained the outbreak, but Brazil, Chile, Colombia, 
Israel, Russia, South Africa, Singapore, and Uruguay have 
already restricted or banned imports of Argentine beef.  The 
EU, a major importer of Argentine beef, has yet to announce 
any restrictions but is said to be considering the issue. 
 
¶6.  Argentine losses might be mitigated because some of the 
restrictions already announced have differing degrees of 
comprehensiveness.  That is, Russia and Brazil have banned 
beef imports only from Corrientes Province.  Chile, Colombia, 
Singapore, and Uruguay have banned Argentine beef exports 
from all but the Patagonia region, while Israel and South 
Africa have restricted imports of all Argentine beef.  A 
spread of the outbreak could result in further restrictions. 
Still, the restrictions already announced are significant: 
Chile imported almost USD 150 million of Argentine beef in 
¶2005.  The figure for Russia was approximately USD 330 
million, and for Israel USD 67 million.  The remaining 
countries that have imposed restrictions to date comprise 
less than three percent of Argentina's export market for 
beef. 
 
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Comment 
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¶7.  It appears that SENASA has made a special effort that 
should polish its reputation by acting quickly to contain the 
outbreak while providing detailed information to Argentina's 
public and trading partners.  Such transparency is highly 
positive and is likely to be received favorably by some 
countries considering restrictions on Argentine beef. 
However, this outbreak underscores the Southern Cone's 
vulnerability to this disease and the imperative for Mercosur 
countries to implement an effective, carefully monitored 
regional FMD eradication program.  Domestically, this 
outbreak is not as disastrous as it would appear for the 
Kirchner Administration.  The GOA is concerned about rising 
inflation (Reftel) that reached 12.3 percent overall in 2005, 
with beef prices jumping over 30 percent.  To increase 
domestic beef supplies and ease price pressures, the GOA has 
in the past year eliminated export rebates for beef, raised 
export taxes on beef from 5 percent to 15 percent, and 
threatened further increases if prices don't stabilize.  The 
GOA also imposed a beef export registry to limit the export 
of lower cost cuts to countries like Russia.  The silver 
lining for the GOA of this FMD outbreak is that restrictions 
on beef exports to some of Argentina's major trading partners 
should help that inflation-fighting effort.  However, foreign 
companies that have invested in Argentina's beef industry in 
recent years may be questioning the wisdom of those 
investments.  The last year's negative developments are more 
than even the most conservative business plan would have 
anticipated.  End Comment. 
 
¶8.  To see more Buenos Aires reporting, visit our classified 
website at:  http//www.state.sgov/p/wha/buenosaires 
GUTIERREZ