MercoPress. South Atlantic News Agency

Argentine farmers' conflict becoming an attrition process

Striking Argentine farmers opposed to a hike in export taxes decided on Thursday to extend the stoppage for another week but also sent a letter to President Cristina Fernandez de Kirchner requesting an “urgent meeting” following on her Wednesday appeal for a national dialogue.

Farmers in Argentina, a leading world exporter of soy, wheat and corn, are locked in a two months standoff with the government over a new sliding-scale export tax that farmers say effectively cuts the profitability of their business. The tax increase links grain levies to international prices, replacing a fixed levy with a variable rate. Protesting farmers halted grains sales last week and began staging roadside protests, raising supply fears but they have promised to let through all trucks except those carrying cereals and oil seeds for export. "Trucks with livestock, dairy produce, perishable and all other food will not be retained", said the four farmers' organizations liaison committee. In the letter addressed to Mrs. Kirchner farmers request a meeting to discuss the controversial export tax hike; make effective agreements reached in dairy produce, wheat and beef; begin working on regional economies (provinces) and start discussing medium and long term camp policies. President Cristina Fernandez de Kirchner left on Thursday evening for the EU/Latinamerican leaders' summit in Peru. The strike not only threatens to hit farm exports from Argentina, which is the world's second corn exporter and third-biggest soy supplier, but also could slow economic growth which has been one of the great successes of the five years of Kirchners administrations. Farmers feel frustrated because weeks of talks with the government have failed to resolve their demands for a change in the tax. "This goes on until Wednesday," said Eduardo Buzzi, the president of the Argentine Agrarian Federation, one the four main farm groups leading the strike, but also added that "we are opening the way for the government to sit down with us to discuss the tax issue, which is the irritant among many farmers. And if it's resolved, it could unlock this conflict". On her Wednesday speech Mrs. Kirchner called for a national dialogue but did not mention the strike, although she refrained from criticizing the farmers as she has done in the past. Cabinet Chief Alberto Fernandez urged farmers to return to the negotiating table. "I think right now the best we can do is sit down and talk. This is no way to reply to the generous call from the president" he told a local Buenos Aires radio. The strike is proving a political test for Cristina Fernandez, who took office just five months ago and has seen her government's popularity ratings slide as some Argentines complain about her handling of the standoff. Farmers have also been meting with provincial governors, particularly in those regions where farming in the main industry and elected officials are relatively autonomous from the all embracing political power, and purse, of the Kirchners. On Thursday they met Hermes Binner, the only Socialist governor of the country but who leads the province of Santa Fe, with highly sophisticated farming and strong agriculture equipment manufacturing which is beginning to feel the pinch of the camp's strike. On Wednesday they visited the Congress in Buenos Aires and rallied support from the opposition. Following the Santa Fe Thursday meeting farmers also announced they would continue with their open meetings and tractor marches in cities all over the country as well as begin collecting a million signatures to help Congress start the process of rolling back the export levies hike. And on May 25th Argentina's main national day, farmers will be holding a massive concentration in Rosario (the country's second city) at the foot of the Monument to the Flag when they will call for "a federal Argentina, new farm policies and development opportunities for all Argentines". The same day President Cristina Fernandez de Kirchner was planning to re-launch her battered administration with a new political proposal. The event has been scheduled to take place in the north of the country, Salta, friendly turf, avoiding any possible protest or violent incidents in Buenos Aires. On Thursday Argentine officials and private bankers made it a point to underline that the Argentine peso, which had been nervously fluctuating, had "stabilized" and that demand for Argentine sovereign bonds had rebounded. However the longer the conflict, the longer local grain and oil seeds markets remain open but with no operations and the longer a sensible political solution is absent, the financial sector will begin to feel restless, when not itchy.