MercoPress. South Atlantic News Agency

Buenos Aires province farmers on 9 days commercial strike against higher taxes

Hugo Biolcati: “an unfortunate day that ended with the start of the strike measure that we'd sought to avoid to the very last”

Farmers Argentina's top agricultural province of Buenos Aires will halt sales of grains and livestock for nine days to protest against a tax hike passed by the local Congress on Thursday, threatening corn and soy shipments from a leading global exporter.

Cash-strapped Buenos Aires province is the country's biggest producer of soybeans, corn and wheat, and the protest might affect grain shipments if exporters run short on stocks. Ports and soy-crushing plants usually have several days’ supplies.

Farmers said they would freeze sales of grains and livestock from Saturday to June 10 over the provincial government's push to raises taxes on the region's fertile farmland, a step they say will put some growers out of business.

“Today is an unfortunate day that's ended with the start of the strike measure that we'd sought to avoid to the very last,” Hugo Biolcati, head of the Argentine Rural Society (SRA), said outside the provincial Congress in the city of La Plata.

The SRA was among four groups that led months of anti-government protests over a hike in export taxes in 2008, one of the biggest challenges of President Cristina Fernandez's five-year rule. The crisis shook local financial markets and pushed international food prices up as exports dried up.

Dozens of farmers, some shouting and waving the white-and-blue national flag, demonstrated in front of the legislature as lawmakers passed the tax increase bill, which Governor Daniel Scioli says is long overdue and will not hurt most growers.

Scioli, seen by foreign investors as a possible market-friendly successor to Cristina Fernandez in a 2015 presidential election, says rural land valuations have not been adjusted since 1955 and should reflect the huge price rises of recent years.

Strong global demand for Argentina's grains and bio-diesel shipments has pumped up the cost of farmland in the world's top supplier of soy-oil and soy-meal and the No. 2 corn provider after the United States.

Members of Scioli's government played down the impact of the tax hike and said growers who have lost crops this season to drought and - more recently - flooding would not see their tax bills rising.

“I'm urging the farmers to rethink this and I'm inviting them to try and resume talks on this,” said Gustavo Arrieta, the Buenos Aires province farming minister.

Scioli, a mild-mannered centrist member of the current Peronist party government has said he would like to run for president in 2015 if Cristina Fernandez's allies do not try to change the constitution to allow her to seek a third term.

Keeping the vast province's finances afloat at a time of slowing revenue growth and double-digit inflation will prove crucial to Scioli's popularity, but he will also be keen to avoid a messy conflict with the farmers.

Many of Argentina's provinces are running budget deficits and struggling to pay wages and providers on time, partly due to reduced transfers from the central government which has seen revenue drop because of a slower economy, smaller crop hit by drought and an overblown consumers’ boom.