January 19, 2007

 

Argentina's farmers to protest soy tax

 

 

Argentina's farmers plan to protest across the country next week over the 4 percent increase in the soy export tax, but haven't decided to strike, the Argentine Agrarian Federation, or FAA, said in a release Thursday (Jan 18).

 

Farmers went on strike twice in 2006 to protest government meddling in agricultural markets.

 

"We are calling a series of protests and meetings next week...and haven't ruled out a strike if the government maintains this anti-farm attitude," the FAA said.

 

"We haven't ruled out a farm strike if we don't get a satisfactory response from the government," Argentine Rural Confederation president Mario Llambias said this week, according to local press reports.

 

Last week, Economy Minister Felisa Miceli announced that basic food products will be subsidised by the new tax on soybeans and soy products.

 

Export taxes on soybeans will rise to 27.5 percent, while soymeal and soyoil will be taxed at 24 percent.

 

The increased taxes will raise some US$400 million for the government, which will also contribute US$100 million from the treasury to create the subsidy programme, Miceli said.

 

The government has stepped into agricultural markets with a heavy hand repeatedly over the past year to rein in domestic prices of farm goods, implementing export limits and forcing market players into agreements designed to slow price gains in food, a key element of the inflation index.

 

Farmers are incensed by government intervention in agricultural markets which they claim unfairly forces the sector to subsidise domestic foods.