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Argentine farm talks stumble on export taxes
Published Wednesday, May 07, 2008 at 05:17 AM

BUENOS AIRES, May 6 (Reuters) - Tense negotiations between Argentine farmers and government officials appeared deadlocked on Tuesday over the issue of grains export taxes, deepening a conflict that sparked a three-week farm strike in March.

Farmers threw up roadblocks and halted sales of grains and beef during the protest after the government introduced a new sliding-scale of export taxes that substantially raised the levies on soy and sunseed products.

They suspended the strike in early April to negotiate, but farmers have expressed increasing frustration with the talks and some are considering renewing the strike.

Following talks on Tuesday, farm leaders said the government was willing to modify the controversial tax system, something swiftly denied by Cabinet Chief Alberto Fernandez.

"The government ... admitted the export taxes are a problem that the government is willing to modify," Eduardo Buzzi, head of the Argentine Agrarian Federation, told reporters after meeting Fernandez along with fellow agricultural leaders.

However, Fernandez contradicted Buzzi and said officials were only looking at how to reduce the impact of the variable-rate taxes on futures markets, which have complained about the new system of levies linked to global prices.

"I hope it's also understood that it's very difficult to talk to people who are permanently threatening to go on strike or block a road," the cabinet chief added in comments to local television.

He said technical discussions would be held on Wednesday, but that he would not take part.

LAST CHANCE

Tuesday's gathering had been seen as the last chance to avert renewed protests in the country -- a leading global supplier of corn, wheat, soy and beef.

Farmers staged roadside protests in farming areas such as Buenos Aires province on Tuesday, with many expressing impatience.

"The government's inability to accept it's made mistakes and make the necessary changes continues to block the building of the consensus that's needed," the Carbap farm group said in a statement.

As well as causing beef shortages and disrupting grains shipments, the farm strike landed center-left President Cristina Fernandez with her biggest challenge since taking office in December.

She has repeatedly defended the export taxes as a way to redistribute wealth and fight inflation in a country where about a quarter of the population lives in poverty, and her government has rejected scrapping the new export tax regime.

However, the resignation 12 days ago of former Economy Minister Martin Lousteau -- the most public face of the sliding-scale system -- raised expectations that changes could be made.

The tax shake-up was the last straw for farmers, who have been angered by a string of government policies intended to keep food costs down, such as price controls and repeated export restrictions on wheat and beef.


© 2008 The Nebraska Rural Radio Association. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.
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