Farm protests: less cuts, though greater damage
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Farm strike is extending to other goods as meetings and demonstrations in the interior of the country grow, with roadblocks impeding traffic of trucks carrying grains. The least patient sectors are now threatening to apply greater police control on roads. Government, already analysing future drop in collection, boosts cleaning of roads. Likewise, truck hikes will be observed in the interior of the country during the weekend. Argentine president Cristina de Kirchner broke the silence on Thursday and stated that she had a "great power of endurance." The only clear thing is that there's no solution in view.
The Entre Rios town of Gualeguaychu, some 125 miles (200 km) from Buenos Aires, has become the focus of farm protests. Argentina is one of the world's top suppliers of corn, wheat and soy, and the protests have pushed up soy prices on world markets.
Argentina's peso currency slipped as investors concerned over a prolonged conflict sought refuge in dollars, and the local currency is now languishing close to a five-year low. Bonds and stocks were also jittery.
Traders at Argentina's main grains market in Rosario said they had no orders. Farmers plan to hold back products from soy crushers and exporters through May 15.
But they have ruled out a repeat of the roadblocks that caused food shortages during March's strike, when the government accused them of trying to hurt ordinary Argentines.
Fernandez's leftist government has offered a tax rebate and transportation subsidies for small producers to cushion the effect of the new taxes, but farmers said they will not go back to negotiations unless she suspends the measure.
The sliding-scale tax system pins export taxes to international prices, raising levies on soybeans to about 40 percent at current prices from the previous fixed rate of 35 percent.
"When they don't have any more cash from exports, that's when they'll have to sit down to talk," said one farmer in Gualeguaychu who declined to give his name.
Argentina's vast fertile farmlands make it the world's No. 2 corn exporter, the third-biggest soy supplier and the No. 4 provider of wheat and beef.
The conflict with the farming community has landed Fernandez with her biggest challenge since taking office five months ago.
Top officials criticized the new wave of protests.
"It's a hugely irresponsible decision that makes no sense at all. It's just about defending the interests of one sector and not about the general interest," said Interior Minister Florencio Randazzo.
Fernandez has refused to scrap the sliding-scale tax system and she defends high export taxes on farm goods as a way to redistribute wealth and combat inflation in a country where a quarter of the population lives in poverty.
Soy exports earned the country $13.47 billion last year while sales of farm goods abroad accounted for 52 percent of total Argentine exports, totaling $29.13 billion.