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Argentine farmers are back in a strike

Monday, January 17th 2011 - 08:57 UTC
Full article 28 comments
Interventionist measures have been repeated for several harvests in recent years,” Hugo Biolcati said Interventionist measures have been repeated for several harvests in recent years,” Hugo Biolcati said

Argentine farmers have halted sales of wheat, corn and soy in a strike over export curbs, rekindling a dispute that helped drive global grains prices to record highs three years ago.

The seven-day protest by growers, which started last night, could fuel supply concerns just as dry weather linked to the weather phenomena La Niña worsens the outlook for soy and corn production.

Farmers in Argentina, one of the world's biggest food suppliers, have been at odds with the government for years over export curbs aimed at taming inflation and guaranteeing affordable supplies of everyday staples.

They say the system of wheat and corn export quotas lets millers and exporters pay farmers low prices, and have urged the government to scrap the caps.

“These distortive, interventionist measures have been repeated for several harvests in recent years,” Hugo Biolcati, leader of the Argentine Rural Society, said when the country's four farming groups announced the strike last week.

The protest is bad news for Christina Fernandez, the president, nine months from the October election in which she is widely expected to seek re-election.

The wave of farmer strikes that began in March 2008 over a tax hike on soy exports battered her popularity, hit Argentine asset prices and disrupted grains shipments at the height of the soy harvest.

However, the impact of this week's protest on grains prices will likely be muted because soy and corn harvesting has yet to begin.

Government officials condemned the farmers for calling another strike, even warning of possible flour shortages, although Julian Dominguez, the agriculture minister, acknowledged wheat farmers' problems.

The government is taking steps to ensure mills and exporters paid fixed local wheat prices to farmers and punish those that did not.

Dominguez advocated an even stronger state role in the country's multibillion-dollar grains trade during a weekend newspaper interview.

“What the grains trade needs in Argentina is the presence of the state in the market - going back to the model of the Federal Grains Agency or National Grains Board, a body made up of the grains exchanges, the state, the co-operatives, that can ensure the market works for farmers,” he was quoted as telling Tiempo Argentino newspaper.

Low rainfalls began worrying the agriculture industry in December in response to La Niña diminishing rain over Argentina. Weather fluctuations have helped lift corn and soy prices close to their record highs of 2008 in recent weeks.
Soaring prices are good news for farmers, but the parched soils are worrying farmers across Argentina's famous Pampa plains.

Argentina is the world's leading exporter of soyoil and soymeal and the third-largest global supplier of soybeans. It is also a major wheat supplier and the second-largest corn provider.

Soy exports brought in $12.98bn in 2009, accounting for 23 per cent of total export earnings.

But this year, soybean group Acsoja has estimated that production would fall by 13 per cent as a result of water shortages.

La Niña, which affects weather patterns across the Asia-Pacific region and in particular the amount of rainfall, is threatening to expand drought in the Americas while bringing more devastating rains to Australia, according to the US Climate Prediction Centre.

La Niña-inspired rainfall has pushed Australia into recording its third wettest year on record in 2010 while causing drought in grain-growing areas of the southern US as well as in Brazil and Argentina.


Top Comments

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  • I

    I think tax on food export is a great tool to keep social unrest from a all out riot, I remember the food prices sky rocketed in Mexico during the rebirth of the bio-fuel engine industry a few years ago, I don't think we want to see that to happen in Argentina, in any case according to another report by “FAO food prices index marks record; threat for global growth and social stability” if anyone here did the math and compared the cost of a food basket in Argentina to that of say Australia, you will notice that as it stands, people in Australia contrubute less of their income to food then Argentina does, and that is not even counting, electricity, rent, gasoline, phone service, cable tv, heating or property tax, it wouldn't make sence to have a coutry like Argentina pay more for food then in a desert like Australia, in any case this taxes damages the big corporates only since the small farmer is not even part of the big export firms, thumbs up for taxes on food exports, and a lets hope for a greater then 3% tax return from the MINING sector, like Autralia's at around 40% tax....

    Jan 17th, 2011 - 10:54 am 0
  • stick up your junta

    a desert like Australia

    Jan 17th, 2011 - 11:22 am 0
  • I

    IGNOREwelcome to planet earth (#2), wake up rise and shine!

    NATURE: message google search thread = “australia demographic and yearly rain fall”
    HITS: About 47,500 graphics out of About 751,000 web results.
    GRAPHICS: link #2 =
    SUBJECT CONDITIONING: language glitch.


    Jan 17th, 2011 - 12:03 pm 0
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