No pain, much grain: Argentina's pampas enjoys a boom as ag exports fly high.

Martin Vassalli says he still doesn't know what hit him. A little over a year ago his family's farm equipment company, Vassalli Fabril, went six months without selling a single one of its trademark Don Roque grain combines. The company's 44,000-square-meter factory sat idle as creditors got antsy.

Today, his 180 employees are clocking in on weekends to churn out a record 30 combines a month. But even at that torrid pace they're unable to meet the insatiable demand of farmers, who wait three months for the privilege of buying one of Vassalli's US$175,000 machines. "I've had to turn down farmers who walk in with briefcases full of cash," says Vassalli, 26. "We've gone from one extreme to the other."

Business cycle swings are nothing new in Argentina. But few expected 2002's record crash to turn around so quickly or be so robust. After free falling almost 11% last year, economic activity rebounded 5.8% in February, led by an almost 18% catapult in industrial production. Driving the boom are the country's 320,000 farmers. They've benefited more than any other sector from the country's early 2002 devaluation. Their goods are sold on world markets in dollars while most of their costs are in devalued pesos.

Signs of the windfall are everywhere. Helped by good weather, soy, Argentina's biggest crop, is expected to report a bumper crop this year, a record 35 million tons. Thousands of trucks line up to dump their loads at main grain port of Rosario. After seeing more than half of its sheep farms abandoned last decade, Patagonia's wool industry celebrated in March its first major livestock auction in a decade.

The renaissance is revitalizing towns like Firmat, which has seen its population swell in recent months on the promise of work servicing all those cash-flush farmers. Among those relocating to the quiet prairie town of 17,000 is Vassani, who abandoned philosophy studies at the University of Buenos Aires to help manage the family business.

Even more remarkably, the agriculture boom has not been slowed by government indifference. To gel, its fiscal house in order, government put export duties of up to 23.5% on agricultural exports, costing farmers $2.8 billion. "In the U.S. and Europe, governments subsidize the farmers. Here, it's the reverse," says Ernesto Ambrosetti, chief economist for Sociedad Rural Argentina, a farm trade organization. Farmers, like most businesses, also complain that the government hasn't moved fast enough to clean up the country's insolvent banking system or renegotiate $95 billion in defaulted bonds, two preconditions for credit to return and investment to takeoff in earnest.

The co-existence of crisis and cornucopia is trickling down in unexpected ways. With banks seen as rue risky and the currency unstable, the overwhelming majority of transactions involves some sort of bartering of grain, which has emerged as a substitute currency. Overnight, low-cost, plastic silos have sprouted up like giant marshmallows to accommodate the 15 million tons of grain--about 20% of the total harvest--which farmers are expected to hold back this year.

Grain not being stockpiled is being "spent." With farmers desperate to deposit their devaluation bonanza anywhere but the banks, a spending spree has been sweeping across the pampas. Sales of John Deere tractors have tripled over last year. The local distributor expects to sell out by July its entire stuck of combines for the year. "There's so much demand that we've bad to invent for the first time a system to allow farmers to place orders in advance," says Aldo Torriglio, president of John Deere Argentina.

Bull tech. Farmers also have taken advantage of the strong dollar to pay off debts, which were converted to pesos immediately after devaluation. Production is being expanded, causing land rental prices to rise again. Sonic are taking advantage of their newfound competitiveness to introduce new technology. Los Grobo Agropecuaria, one of Argentina's largest farming outfits with more than 250,000 hectares under its management, spent its windfall on three new employees charged with streamlining the company's hack office and introducing satellite technology in the tracking of herds. "We're spending $200,000 alone just to migrate "all our systems from Microsoft to Linux," says Andrea Grobocopatel, financial manager of the company. "It's something we couldn't have done before."

Money aside, some farmers are watching Argentina's new government carefully. "It's still very dangerous to look beyond the next harvest. Nobody is making business plans," says Enrique Erize, vice president of consulting firm Novitas.

But who needs tomorrow when they've got so much work to do today? In February Vassalli and his sister Mariana, 37, created a new company and paid $1.9 million to rescue from bankruptcy a second factory bearing their family name. Five times the size of Vassalli's operating plant down the road, the factory languished under several different owners during Argentina's fixed exchange rate last decade.

In the 1970s, 1,000 workers here churned out five combines a day for customers across the continent and in South Africa. Vassalli eventually hopes to restore the second factory's international market, but for now he's too busy helping his main operation fill all those back orders. "We've recovered our family's name," Vasalli says. "It's a dream come true."