Again the absurd impasse in govt-farm clash

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It's a chronicle of linked failures. Argentina has devoted all its attention till last night to government and farm leaders, hoping that they reached an agreement in a 72-day dispute which has brought strong political and economic losses, for which both sectors are to be held responsible. The meeting failed when farm representatives expressed feeling disappointed by cabinet chief and economy minister refusal to talk about sliding-scale export tariffs and compliance of other measures. They were so exasperated that, for a moment, they hid behind the office of economy minister Carlos Fernandez and threatened to stay there till receiving a solution. However, cabinet chief Alberto Fernandez insisted, during a long press conference, that it had been a positive meeting and repeated his arguments. He looked as though applying official criterion of putting pressure on farm, like president Cristina de Kirchner did yesterday in a meeting with unions, and waiting the result of Sunday ceremonies, where forces will be gauged. Farmers will decide tomorrow what they will do, they are thinking of a new strike. Last night, farmer Alfredo De Angeli cut traffic again in the city of Gualeguaychu. Absurd.

Argentine farm leaders said they felt cheated at Thursday meeting with government to try to end a three-month conflict over soy export taxes, but government officials said talks were fruitful.

It was the second time since March that both sides have started talks to try to resolve a political crisis over the new soy tax.

Farm protests paralyzed grain exports from Argentina -- a major world supplier of corn, soy, wheat and beef -- in March and part of May.

"The meeting was bad. The (government) attitude is to put off an answer," said Eduardo Buzzi, head of the Argentine Agrarian Federation, one of the four farm groups that met with top government officials for 90 minutes.

Buzzi said he and the other leaders felt "cheated" because they wanted to discuss on Thursday their central demand, that authorities suspend the new soy tax, but the government put off that topic until next week.

May 25 is Revolution Day in Argentina, an important public holiday, and government is planning a big public ceremony to fortify support for its policies, such as the new tax.

Farm groups are planning a huge rally the same day in the city of Rosario to protest against agricultural policy.

Cabinet Chief Alberto Fernandez characterized the talks as fruitful, and said government had agreed to talk about the tax and about soy producers' complaints that it might distort trade on grain futures exchange.

President Cristina Fernandez de Kirchner has defended the sliding-scale soy export tax as a mechanism to distribute windfall profit from soy at a time of high world prices for commodities, both for food and for biofuels.

Cabinet Chief Fernandez said talks next week will focus on futures markets' operation and that technical groups will be formed.

"We will work to find a solution," cabinet chief said in a news conference, where he did not take questions.

Fernandez reiterated government's previous offer of tax rebates for small producers and of transportation subsidies for soy growers far from ports.

He said those measures would compensate 80 percent of growers for the new tax.

Fernandez said it was strange that a very small number of farmers had asked for rebates and subsidies so far. He attributed so to the fact that probably many of them did not have properly registered businesses.

Farmers have complained that government has held up beef exports since March strike, by asking at customs more than the usual paperwork.

Beef exports are getting back to normal, Fernandez said, but he added that government is rejecting export petitions from companies that are not following rules related to suply of domestic market with certain beef cuts and government-set maximum prices.

Farmers have also complained that government has refused to reopen wheat export registries, which have been shut for months.

Fernandez said that the "wheat issue is very hard to resolve." He said government does not want to allow wheat exports until it is completely sure that 6 million tonnes of the 16 million tonne crop will stay in the country.

Cabinet chief said 1 million tonnes of wheat is still missing and said that had to do with the informal way the agricultural sector works.

"We all agree the excess should be allowed to be exported, but we don't want to allow tax evasion," he said.

"The sector operates with a high degree of informality and that must be corrected," he said.

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