Will Tourists Take Over from Sheep?

by Joshua Goodman

Petty Nauta is a daughter of the Deep South. Not the American Civil War version, but one where jagged mountains tower over barren plains at the tip of the world: Patagonia. Instead of Tara, her Scarlett O'Hara-like adolescence was spent on Telken, the sheep Estancia (or farm) that her father Jack "Jumbo" Campbell Clark established in 1915. The 25,000-hectare spread is located in Argentina's southernmost mainland province, Santa Cruz, a territory half the size of France but with only 217,000 inhabitants. And in many respects, Petty's idyllic life at Telken has barely altered over the years. Colorful lupins still adorn the English garden out front, diners are summoned with a tiny silver bell, and the same poplars Petty helped her mother plant as a child have grown tall and full to shield the corrugated iron homestead from Patagonia's winds.

But in numerous, unseen ways, the privileged world Petty's ancestors fought hard to build is crumbling all around her. Although the house Jack built is still in good shape, behind it sits a barn stacked full of fine, Merino wool that can't find a buyer at prices high enough for Petty and her husband, Coco, to eke out a decent living. Meanwhile, most of the neighbors the couple used to depend on for company during the lonesome winters have left. By one count, some 50% of Santa Cruz's 1,200 estancias have been abandoned in recent years, their quaint cascos (main houses) left to rot, or worse, be overrun by vandals--unemployed farmhands usually, with no regard for their historic value. At least Petty and Coco have savings to fall back on. On other farms the situation is desperate. At one--locals respectful of their neighbors' privacy don't like to say which--a respected family that once dined nightly on its tasty homegrown mutton now barely staves off hunger by peddling Coca-Cola to the dozen or so cars that pass by its ranch each day. "We know the farm has no future, but it hurts too much to part with all the memories," says Petty, who has lived the better part of her 63 years at Telken.

It wasn't always like this. Patagonia's estancias used to be vibrant, prosperous places, each a mini-metropolis that functioned as a refuge from the cold wind and empty plains beyond. It was accepted that a warm meal and night's rest were an unwritten right for any traveler on the wind-haunted gravel roads that link Patagonia's sparse towns. The farm gates were never locked, no matter what time of night you arrived.

To be sure, with poverty so widespread in Latin America, there are worse fates than that of a struggling sheep farmer. All the same, the demise of the family farm in what until now had been one of the world's last great frontiers is reason enough for regret.

Development came late to Patagonia. When Jack established Telken in 1915 as a 19-year-old New Zealander with little more capital than Scottish toughness, Patagonia was still largely unsettled. To strengthen its control over the untamed area--and cut short a brewing border conflict with neighboring Chile--the Argentine government enacted a law, similar to the U.S. Homestead Act, which awarded huge swaths of virgin land to settlers. Unlike in the American West, though, the land grab never reached fever pitch. To most, the prospect of farming in such a far-off, barren region seemed insane--especially since good land was available in the more humid Pampas region. Still, for adventuresome lads like Jack, the exotic destination was a boyhood dream come true, and Patagonia's star-filled sky a path to independence from the strictures of their homelands. The last names of those who came at the same time--Madsen, Dzinic, Von Heinz--read like a register of the 20th century's great immigrant waves. Also taking refuge in the region's hidden valleys were fugitive bandits (Butch Cassidy and the Sundance Kid among them), exiled socialists, and sailors who had just jumped ship, all looking to reinvent themselves.

Over time, this melting pot of oddball farmers constructed its own culture, one centered on the only economic activity feasible--sheep farming. The first Romney sheep arrived around 1885, sent by English wool barons from the Malvinas/Falkland Islands. Still other enterprising settlers drove pedigreed Merinos from Buenos Aires province during a two-year, 2,700-kilometer journey, a sort of antipodean Long March that hardened them to the chronic droughts and cold winters ahead. But none of the early hardships deterred the settlers. What Mother Nature wouldn't provide, physical strength and sheer resolve would: By 1937, Patagonia was, behind Australia, the world's second-largest wool producer.

But the good times couldn't last forever. Blessed with seemingly endless tracts of land, the material ambitions of some farmers began to outstrip the dry, windswept terrain's ability to sustain such extensive farming. By the 1960s, soil erosion set in and Patagonia's highly sensitive ecosystem began a process of desertification that by one official estimate threatens 93% of the region's surface. The rise of synthetic fibers caused great economic harm, dragging wool prices down by 25% last decade, according to the Argentine Wool Federation. The fact that Patagonia's mystique would later be co-opted and transformed into a brand name to sell man-made fleeces the world over was a bitter irony. Today, only 13 million sheep roam Santa Cruz, a fifth of the number during the region's peak era. "Hard work and ingenuity have nothing to do with it," says Joaquín Allolio, a Buenos Aires wool trader who has been traveling to Patagonia for more than three decades. "Some of the best farmers I've ever seen have ended up failing because of market conditions."

Slow start. With wool prices unlikely to recover to pre-Gore-Tex levels anytime soon, most estancias are desperate for an alternative. To supplement their meager incomes, ranch owners have turned to tourism. There are currently 31 estancias in Santa Cruz open to tourists, ranging from refurbished, luxury lodges that fetch up to $400 a night to more humble dwellings, like Telken, that conserve the austere style of its original occupants. For guests, the majority of whom hail from Europe and Buenos Aires, the opportunity to commune with such pristine nature, be it through fly-fishing, horseback riding, or searching for the elusive and tiny Huemel, a native deer species, appears to be an unforgettable experience.

But as interesting as visiting a working estancia can be, tourism isn't yet a sustainable enterprise for ranch owners. The high cost of catering to a wealthy clientele in this remote setting means that the tourism component accounts for only about 10% of a typical ranch's total income. Deterring an even larger influx of tourists is the fact that conditions at most estancias remain primitive. For one thing, you can leave your cell phone at home--contact with the outside world is usually by radio only. And for those wishing to enjoy a great book late into the night--well, the generator at Telken shuts off at around 11:30. Plus, the inconvenience of getting to the secluded farms--some are a good 10 hours by Jeep from the nearest airport--is not to be sneezed at.

Still, some investors are betting tourism will take off here. Cielos Patagónicos, a dude-ranching venture started by young, sporty Argentine businessmen, recently bought 80,000 hectares on five rundown properties for an incredibly low price of $40 per hectare. Its crown jewel is Estancia Menelik, a 10,000-hectare farm located at the foot of Cerro San Lorenzo, the highest peak in the Patagonian Andes. "We love Patagonia and are committed to protecting its heritage, but we wouldn't be investing here if there wasn't a real business opportunity," says Cielos President Lionel Sagramoso.

The people who call Santa Cruz home hope he's right. And if he is, Patagonians like Petty will do all they can to craft themselves a better future. For even if the golden days are gone, there are still all those past sacrifices to honor. As long as such memories endure, Patagonia's future is in good hands.

© Joshua Goodman, originally published in BusinessWeek Online.