MercoPress. South Atlantic News Agency

Argentine farmers and grain traders warn government

Argentine farmers' organizations announced they would fight a reported plan to nationalize grain trading, warning that such a move would deepen a long-running conflict between the government and agricultural groups.

Growers' groups were reacting to reports in Argentine newspapers that the government's tax collection agency, AFIP, is considering creating a body to control the domestic and foreign trading of grains, flours, oils and even possibly beef. The government's reported goal would be to supply the domestic market first and export the leftover. The breaking news appeared in Buenos Aires leading newspapers La Nacion and Clarin. But word of a possible nationalization enraged agricultural groups, just three days after farmers and the government reopened talks on solving a bitter dispute fuelled by government attempts to raise grain exports taxes to generate more revenues. "This measure exceeds anything we have imagined and will be strongly resisted by the agricultural sector" anticipated Argentine Rural Society president Hugo Biolcati. The main farmers' organizations, grain markets and futures, almost thirty organizations, published full pages on the country's main newspapers under the headline "Argentina moving backwards" arguing that the government control of grains trade would force another conflict "unnecessary but of unpredictable consequences". Leading newspapers La Nacion and Clarin reported Friday that the government could be trying to pressure growers into selling some 5 million to 9 million tons of soy left over from the last harvest ? generating hundreds of millions of dollars in tax revenues. The Buenos Aires media speculated that the official announcement could come as early as Sunday when President Cristina Fernandez de Kirchner delivers her state of the nation speech to the two houses of Congress. However another option would be for the government to create grains and beef trade monitoring office which would act in the market with the purpose of establishing target prices for sales and purchases. Argentina is one of the world's largest producers of soy, corn, wheat and beef, but both growers and the government have been hit by a drought and falling grain prices amid the world economic crisis. Growers halted sales and blockaded routes for months last year, causing sporadic shortages in markets and prompting Congress to kill a plan to raise export taxes on some farm products