Lukewarm farm strike: avoiding popular upset
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Talks between Argentine government and farm broke down. The four farming entities announced an 8-day strike which will block marketing of grains for export. This second chapter will be a lighter version of the one launched on March 12, after former economy minister Martin Lousteau announced sliding-scale export tariffs. Despite farm leaders did not boost roadblocks as protest, they neither guaranteed that farmers would not stage them. In Gualeguaychú, the capital of farm protests with Alfredo de Angeli leading them, they blocked truck traffic last night. In this way, Argentina has been for 58 days in a deadlock due to this unprecedented conflict that government has created. By eliminating cap on sliding-scale export taxes and after Lousteau's resignation, a solution could have been found really quickly. Yet, government has opted for not giving in and economy will be the one suffering the consequences. There are increasingly less hopes of an agreement modifying these tariffs for re-launch of K management on May 25. And farther away are those of the social pact promoted by the end of 2007. In fact, effects go beyond economic issues. The opposition has come out to seek its yield. Farmers will visit lawmakers and mayors in their houses to explain farming problems to them. Argentina has never had such a big crisis arising from an easily controllable matter. We should only take a look at the fact that soy taxes are not in force for top values. They will only come into force if price rises. What's more, it's neither leaving too much extra funds to government, since they are five points higher than 2007's. Thus, nobody wins in this clash. The entire country loses.
That protest caused food shortages in Argentina's supermarkets and landed President Cristina Fernandez with her biggest challenge since taking office five months ago.
It also hit grains shipments, and U.S. soy futures soared on Wednesday as the specter of fresh disruption loomed.
At a joint news conference, agricultural leaders said the freeze on selling goods such as corn and soybeans would last until May 15, but added that farmers would not block highways because they did not want ordinary Argentines to suffer.
Farmers manned roadblocks and halted sales of grains and beef for 21 days in March after the government introduced a sliding scale of export taxes that substantially raised the levies on soy and sunseed products.
Soon after Wednesday's announcement, Cabinet Chief Alberto Fernandez called on farmers to show "good sense."
"We've got to be more sensible. And that's coming from someone who ... feels he's had too much faith in them. I would have loved to have kept on negotiating," he told Radio 10.
Even before a new wave of protests was announced, farmers staged roadside protests across the vast South American country -- the world's No. 2 corn exporter, the third-biggest soy supplier and the No. 4 provider of wheat and beef.
"It's a long struggle and we won't give up. If the president wants us to be out here for longer, we'll be here for longer," said Alfredo De Angeli, a farmer from the Entre Rios province who became well known during March's strike for his fiery speeches to farmers manning roadblocks.
President 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.
Increased revenue from export taxes has helped the government maintain healthy budget surpluses and keep the peso currency weak to stimulate exports.
However, the tax shake-up announced on March 11 proved a detonator for farmers already angry over a string of policies intended to keep food costs down, including price controls and repeated export restrictions on wheat and beef.
The new 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.
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.