Write-up taken from the IRRI's Rice Almanac (2013):
Uruguay is located in South America, bordering Argentina in the west, Brazil in the north and northeast, the Río de Plata in the south, and the Atlantic Ocean in the east. Its national territory totals 17.6 million ha, of which 17.5 million ha are land and the remainder water. Almost 95% of the land area can be used for agriculture and livestock and 4 million ha are available for crops. However, to avoid soil degradation, rotation between pasture and crops is carried out, such that only 1.6 million ha are available at any one time.
The Uruguayan terrain is mostly plains with low hills; there are no high mountains. In the northwest, hills are mixed with valleys and plains. A large part of the country consists of fertile pasture and all the territory is reached by an extensive water network from the rivers Uruguay, La Plata, Merín Lagune, and Negro.
Five geographic regions can be distinguished based on social, economic, and cultural factors: north, center-south, east, south, and west. The northern region covers 13% of Uruguay and includes the departments (provinces) of Rivera and Tacuarembó, with an economy based mainly on livestock and a small amount of agriculture and industry. Crops include rice, soybean, sunflower, maize, sorghum, wheat, potato, and cassava. The northeastern region covers 28% of Uruguay, including the departments of Artigas, Salto, Paysandú, and Río Negro. Intensive livestock and agriculture are common, and there are extensive orange plantations. The center-south includes the departments of Durazno, Flores, Florida, San José, Canelones, and Montevideo. The economy there is based on intensive livestock with forage production mainly in the north and milk production and intensive agriculture in the south. The southwest is characterized by the division of the Cuchilla Grande, which has many divergent ridges separating the headwaters of the rivers Uruguay La Plata, and Merín Lagune. Finally, the eastern region encompasses the departments of Cerro Largo, Treinta y Tres, Lavalleja, Rocha, and Maldonado, where extensive livestock ranching is carried out—mainly sheep in the highlands and cattle in the lowlands. In Treinta y Tres, Cerro Largo, and Rocha, rice is farmed.
Uruguay is characterized by having a small proportion of arable land with a high risk of soil erosion. Maintenance of soil fertility through the integration of traditional crops and livestock production is necessary.
The climate is humid subtropical without large fluctuations in temperature and rainfall during the year. The maximum temperatures vary from 28 to 33 °C and the minimum temperatures from 6 to 9°C. Rainfall varies from 1,000 mm per year in the south to 1,300 mm in the north. Strong and continuous winds are common most of the year.
The population increased by 0.35% per year, from 3.1 million in 1990 to 3.4 million in 2011. Approximately 93% of the population is urban and increasing while the agricultural population has decreased, from 0.39 million in 1990 to 0.33 million in 2011. The most populated departments are those in the south, southwest, and northwest; the least populated areas are those used for livestock ranching. The highest density is in the capital city, Montevideo, with more than 1,000 persons per km². The capital of each department has a relatively high density, ranging from 100 to 500 persons per km². Elsewhere, population density is less than 10 persons per km².
The economy of Uruguay is characterized by an export-oriented agricultural sector and high levels of social spending, public expenditure, and investment. Since 2004, the economy has shown positive growth despite the global financial crisis. The service sector contributes 70% of GDP, followed by industry with 20.9% and agriculture with 9.1%. The national poverty rate decreased rapidly from 30% in 2007 to 19% in 2010; similarly, unemployment fell from 12% in 2005 to 7% in 2010.
Recent developments in the rice sector
Rice production in Uruguay is based on an extensive system of rotation with pastures and integrated with livestock production. It requires high investments in inputs, certified seed, labor, machinery, and infrastructure, including irrigation systems, storage rooms, silos, and roads. However, it also generates employment not only in the production subsector but also in industry and trade; rice is in third place, after beef and wool, in its contribution to agricultural GDP.
Rice is grown mainly in the north, northeast, and east by small (less than 200 ha), medium (200–500 ha), and large producers (more than 500 ha), with the average farm being 300 ha—bigger in the east region and smaller in the north. Farmers growing other crops as well as rice tend to have larger (400 ha average) farms.
The rice production system is irrigated lowland; direct seeded or broadcast and then flooded using pumps or gravity irrigation. Usually, the rice crop is grown in fields left fallow or with forage for at least 4 years. This rotation contributes to soil preservation and makes a strong contribution to farmers’ economic stability.
Uruguay is 33rd among rice-producing countries and eighth in South America. Rice production has been increasing since 1961 and, since 1990, the growth rate has almost doubled. The highest production occurred in 2008, with 1.33 million t. The most productive regions are the north and the east, especially the departments of Treinta y Tres, Rocha, and Cerro Largo, which account for 77.5% of the rice area.
Yield has also increased significantly, by almost 40% during 1970-95 to 5.5 t/ha due to improved cultural practices and cultivar Bluebelle (from Texas, US). From 1995 to 2010, national average yield increased by a further 40% to 7.1 t/ha because of improved farming practices, the adoption of local high-yielding cultivars (El Paso 144, INIA Tacuarí, and INIA Olimar) and strengthening of the rice sector through association with FLAR. Recent weather conditions have also contributed to the high rice yields because of the La Niña phenomenon (low humidity and high radiation periods) in at least 5 of the past 7 years.
Rice area doubled from 78,091 ha in 1990 to 161,900 ha in 2010, with 55% of the sown area in the east, 24% in the center-north, and 21% in the north. The potential area for rice is 1 million ha. However, due to crop rotation practices, all the potential area would never be planted simultaneously.
The rice sector in Uruguay is characterized by vertical integration of production, industrialization, and trade. Farmers sell at a price fixed by the Rice Cultivators Association and the National Rice Millers Association, such that farmers, especially on smaller farms, can sow and harvest without concern about price and the rice industry can work at its maximum capacity. This vertical integration also facilitates other common policies related to seed, research, credit, etc.
More than 90% of national rice production is exported. Uruguay was the sixth-largest paddy rice and milled rice exporter in 2009, with most rice going to Brazil. Uruguay’s rice production is unique in its relatively low rate of adoption of new cultivars, use of certified seed guaranteeing grain quality and sustainability with low inputs, and, in contrast to other exporting countries such as the US, Uruguayan mills do not mix varieties but keep track of the identity of each variety.
Rice consumption in Uruguay is one of the lowest in South America although caloric and protein intake from rice have risen since 1990. Rice consumption per person per year increased from 9.3 kg in 1995 to 19.2 kg in 2009; daily calorie intake from rice increased from 3.5% to 6.8% and protein from 2.1% to 4.8% in the same period. Contrary to the general situation in other countries where rice consumption is opposite in trend to maize and/or wheat consumption, maize and rice have both increased. At present, rice, wheat, and maize consumption are increasing at the expense of meat consumption.
In the northwest, irrigated rice is grown on slopes in the basins of the Negro, Cuareim, and Uruguay rivers in the departments of Artigas, Salto, Paysandú, Río Negro, and Soriano. In the departments of Durazno, Tacuarembó, Rivera, and west of Cerro Largo (central region), irrigated rice farms are scattered along the basin of the Negro River. More than half the area suitable for rice is in the east region, in the basins of the Cebollati, Olimar, and Tacuarí rivers and Merín Lagune in the departments of Treinta y Tres, Cerro Largo, Lavalleja, and Rocha.
Production costs. The rice crop is the most expensive in Uruguay because of the costs of seed, agrochemicals, fuel, labor, machinery, equipment, irrigation, drainage systems, and construction of water reservoirs. The government does not give subsidies because rice is a business and not a subsistence crop. Rice production has a high fuel requirement; variation in fuel prices affects rice production directly. Production costs increase every year by 10–15%. Rice in Uruguay is not subsidized as it is in other countries, especially the US, the main competitor of Uruguay. Smaller Uruguayan rice producers cannot cover the high production costs; some become indebted and finally drop out of rice production.
Markets. In 1985-2003, Brazil was the main buyer of Uruguayan rice, taking 70–90% of Uruguay’s total production. However, since 2003, Brazil has been self-sufficient. Low export prices have affected Uruguayan producers, and rice exports have decreased. Additionally, since 2011, Brazil requires rice exporters to provide a residue analysis, a situation that makes rice trade difficult.
Irrigation systems. Because of constant variation in the levels and volume of the water in the rivers, it is necessary to build reservoirs and dams for irrigation and use pumps to irrigate the rice crop.
Weather. Water availability is the main limitation in rice farming; in dry years, it is sometimes necessary to use additional water pumps, whereas excess rain, especially before the establishment of the crop (September-November), can delay sowing and affect the reproductive phase. Excess rain in January and/or February during grain filling can also reduce production due to a decrease in solar radiation.
Diseases. Abundant rainfall as a consequence of the El Niño phenomenon favors the occurrence of Pyricularia, a fungus not normally common or important in Uruguay.
Markets. As a consequence of a drop in exports to Brazil, Uruguay is exploring new markets in Iran, Peru, Central America, and Europe. Uruguay has a great advantage in Europe because of the excellent quality of its rice, none of which is transgenic, unlike some US rice varieties.
Rice added value. Certified seed is commonly used and the selection process, visual and manual, is very strict. As a result, Uruguay’s rice production excels in its grain quality and sustainability; red rice is not a problem.
Water availability. The gasoline-based water pumps are being replaced by more efficient electric pumps. All the irrigation systems should be working with electrical energy within a few years. In addition, the Rice Cultivators Association, together with the Ministry of Agriculture and Fisheries and local governments, is building dams to ensure water availability for the entire rice production cycle.
Sources: FAO’s FAOSTAT database online and AQUASTAT database online, as of September 2012.
For MV and irrigation coverage: www.aca.com.uy, FAO’s Aquastat online database.