Having purchased 44-hectares or 108-acres of raw (blanco) land in San Rafael in 2008 and turning it into vineyards maybe I have had experience and maybe I can help.

In 2008 General Alvear’s land prices were cheaper than San Rafael, Cordoba’s land prices were higher.

My wife and I looked at a zillion potential parcels of land and existing vineyards. As is often the case the cheapest parcels were large, e.g. 100 hectares, and located 30 – 45 minutes out of town somewhere in the boondocks where there was NO water or electricity. So what is the land is US$500 per acre when electricity is 20 miles away and there is no water source.

To me a huge concern when buying raw land or an existing fruit orchard, olive or walnut grove or vineyard is an adequate and stable quantity of “WATER”.

Water shortages have occurred in Mendoza Province and likely will again. The snowmelt from the Andes supplies a Government resevoir system and then the water is distributed to the San Rafael valley.

We are allocated 26 hours per week. When buying land check with the appropriate Water Municipality to make sure that you have a Government allocation of water and how much is it. Don’t take the word of the Seller, his/her Real Estate Agent or 3rd Party Rep who is selling the property. When times get tough and there isn’t enough water to go around, the Government won’t necessarily decrease your weekly allocation but it can drastically cut the volume of water you receive during the allocated hours, ergo less water, maybe 50% less.

This reduction prompted us drill a water well and that is a whole different story. First let me preface that if you are just talking about a 1” diameter well for residential consumption obtaining a permit might be relatively easy, however if we are talking about a 10” diameter water well for a fruit orchard, olive or walnut grove or vineyard, then the right to drill that water well should be evidenced on the DEED and verified. Even if such is the case then you have to obtain a “Permit” to drill. Permits are scare today so don’t assume you can get one. Once you have a permit you’ll need estimates regarding the cost to drill. On our vineyard property we drilled 70 meters, about 227 feet, before hitting crystal clear salt free water. Our 10” water well produces 350,000 liters per hour. The cost in 2012 was US Dollars $85,000.

What if the property already has a water well? Good question but you still need to perform your Due Diligence. Is the water well legal? Does a right to drill a water well exist and was it installed with all of the appropriate permits etc. San Rafael and most other cities are rife with illegal water wells. And if the water well is legal is it functioning correctly. San Rafael and most other cities are rife with poorly maintained water wells that barely work and the cost of repairs can be in the tens of thousands of US dollars. If you have an “illegal” water well and a neighbor or even a water well repair service rats you out, the Government can close the water well down forever.

Hope this helps.

Post a Reply

00abuse

Choosing an expat health insurance provider is an important decision. Get a quote from our trusted expat health insurance partner, CIGNA. With Cigna Global Health Options, you can create an international health insurance plan that's perfectly tailored for the needs of you and your family.

Learn More Get a Quote

I would add a few notes to Tom's reply. A recent article in Diario San Rafael mentioned that about 20,000 hectares of vineyard land in San Rafael has been either abandoned or reduced in yield. I would say the reason is that the price of grapes for the private producer of 5 to 20 hectares has remained at about 3 pesos per kilo for years but the cost of producing the product has steadily increased. It is no longer profitable for the small producer to farm at the prices paid by the bodegas or the cooperatives. The same applies to the producer of stone fruit here. The prices paid for land here reflect this argument as well as Tom's reasons. You cannot make a profit if you have to pay a farm worker, buy fertilizer, pay for diesel fuel, etc. Very sad but true.

Mike Kelley

Post a Reply

00abuse

Mike,

Sounds like you own, or owned a fruit orchard or vineyard???

Like many I anxiously await this year's "Official" announcement for grape prices that are supposed to be 25% - 35% higher. We will see, meanwhile the inflation is around 40% and the wages of the vineyard workers will likely go up 30% again for 2016 as it did in 2012, 2013, 2014 and 2015.

In 2012 I received AR 3.2 pesos per kilo of Malbec grapes, in 2015 I got AR 3.4 pesos.

It makes me what to switch my crop to saffron or pot.

Post a Reply

00abuse

Thanks for the insightful replies, I do wonder though how is it that some property owners in san rafael are able to draw water from deep wells without a permit? and without anyone knowing how much they are actually pumping? doesn´t the authority have some regulatory body in place to inspect producers every once in awhile? just to ensure the water is not being misused... every well in canada has to be registered even if not active.

maybe the legal wells are more expensive to drill per meter? also how about a 4 inch well for micro farm production, drip irrigation kind of thing, is there a website with adequate information on this?

and last but not least, how much ground water there actually is in san rafael, bowen areas? would terribly suck to drop 20K on an empty well.

thanks

Post a Reply

00abuse

Expat,

Water shortages make desperate men do desperate deeds like an owner of land with an "illegal" water well telling a prospective buyer "No problema" when there could be a huge problem like having your well permanently shut down. Many water wells were drilled without a right to do so and even if such a right existed, the well was drilled without the proper "Permits" and inspections and "Sign Offs" by the appropriate authority.
US$20,000 would be cheap to convert an "illegal" water well to a legal status, how about paying US$100,000 - US$200,000?

Post a Reply

00abuse

Wow that pricey?

What makes drilling there so expensive? layers of bedrock? or some sort of local monopoly? I thought smaller diameter perforations are cheaper to do,

such as 4 inch instead of 10 inch, also maybe not as deep if used strictly for irrigation?

Post a Reply

00abuse

Last year I received a quote fro installing a 2 inch well on my property in Las Paredes from a legal driller. The well would be usable ONLY for domestic use and the cost for the well with casing (4") and an Italian 2 inch pump, drilled to 35 meters and capable of pumping 12,000 liters an hour was 83,000 pesos, about $US7000 at the time. If you were caught using it for agricultural purposes there would be a large fine.


Miked Kelley

Post a Reply

00abuse

expat0tree,

Yes, the smaller the bore of the water well in theory the cheaper the costs to drill. For example a 1" diameter well for my Worker's house was 40 meters deep and cost me about US$1,500 in 2008 when AR 3.2 pesos = 1 US$. I would imagine a 4" water well would cost less than my 10" diameter water well drilled in 2012 at a cost of US$85,000 and had to be 70 meters deep. The well digger hit water way before 70 meters but when testing the water for salinity (salt) he decided to go deeper until he reached crystal clear, salt free, water. My 10" diameter water well delivers over 350,000 liters per hour and will adequately irrigate my entire 108-acres. I am not sure if a smaller bore well like 4" would suffice. Thus you must add in your water well cost equation how many hectares you will need to supply water to. You don't want to drill a 4" water well for US$50,000 and then find out it can't supply sufficient water for the amount of hectares you want to plant or already have planted with orchards, vineyards etc. No, drilling my well did not include drilling through bedrock but it did include installing casing the the rise walls would not cave in at a future date. My water well guy did not guarantee he would hot water for me but he did geological studies along with checking with neighbors to see how deep they had to drill for water. Trust me, learning about drilling a water well was equivalent to a college education for me.

Post a Reply

00abuse

expat0tree,

Sorry for the dilatory response but you mention hectares are so cheap in San Rafael, how cheap are those prices and where are they located? Every time I see "cheap" hectares for sale they are 30 and more likely 45 minutes from the center of San Rafael thus if you needed to buy a lightbulb or toothpaste it would require a 1 1/2 hour round trip. And the availability of electricity might be miles away and at a cost of UD$1,000 per mile and the cost of a water well, if legal, another huge chunk of money. If you add the cost of installing electricity that will be necessary to run a submersible water well pump and the cost of drilling a water well you could very quickly quadruple the cost per hectare. Suddenly US$500 per hectare skyrockets to US$1,500 or even US$2,500 per hectare.

Post a Reply

00abuse

Mike,

Thanks for the info. To me my ultimate decision of how big in diameter would be the well I drill would depend on how many acres of land I had. If your land size is modest then a 2" well restricted for personal use might work but if I ever envisioned planting a vineyard or orchard then I would seriously take that into consideration. Also, land with a large water well will most definitely command more money.

Post a Reply

00abuse

Yes Tom.
My timing of the water flow required for my 10 hectares worked out to 5 million liters per irrigation cycle, 8 days in my case. Even if I went drip irrigation the requirement drops to 3 million liters plus the cost of lines, pumps, 3 phase electricity to the pump station, a computer driven system that my worker could operate(???). I have 96 rows of vines at 1/2 kilometer per row so go figure. I just hope that the watershed from the Diamante keeps flowing until I retire..
Mike

Post a Reply

00abuse

Just a note to expatOtree.

Yes the canal system is monitored but it is a very difficult job. During the last irrigation deficit the irrigation people found numerous pipes leading into the irrigation canals, siphoning off a large quantity of water. All of us that pay for our water are being shorted by these thieves and with a corrupt system this will undoubtedly continue. This is the reason for a deep, large well but the cost, as Tom has explained, is prohibited for the small producer.

Mike

Post a Reply

00abuse

TomP

Yes the land i saw is indeed outside of town, with no power service and no legal water source, but the ditch seemed promising at first (quite wide) until the story of thieves sucking on it without any policing from the local department. and all the other folks that bypass water regulations all together.

the real question now is what can the new government do to tighten the screw on these issues? and if the answer is 'nothing much' precisely because the corruption that is deeply rooted at the local level, then maybe developing newly bought hectares may not generate a return on investment some years down the road, correct me if i'm wrong.

Post a Reply

00abuse

ExpatOtree,

The right to drill a water well is recited in the Deed. If it's not in the Deed then you don't have a right to drill a well.

Even when my Deed recited I had a "Right To Drill A Well" I still needed to turn in the proper Government paperwork and obtain a Permit. Getting a "Permit" can take months, maybe a year or more. One way the Argentine Government cuts down on the number of water wells being drilled during years of low Andes snowmelt is by delaying or outright denying the issuance of a "Permit".

The same Argentine Government local Municipality, San Rafael for example, dictates what the weekly water allocation will be to a parcel of land and this is public recorded. It sounds like your prospective land is next to a major canal, Typically smaller canals carry water to your parcel. My 108-acres is allocated 26 hours each week but hours can be deceiving, volume also counts.
You described why I am not a fan of "stand alone" properties that are in the middle of nowhere.. May I ask how much per hectare is the asking price of he parcel you are looking at?

Post a Reply

00abuse

US$1500 per hectare, if the entire 38 ha bought outright, but it also seems like he took it off the listing now, so he can relist it later? either way it's obvious that to drill a well there would require a substancial investment, plus i didn't like the road, the land has been abandoned.

other parcels appear to be more welcoming, but then again, the water issue seems to haunt just about anyone.

Post a Reply

00abuse