January 25, 2011

Argentine farmers in protests against grain export limits

Argentine farmers have stopped grain sales in the midst of a seven-day strike to show objection to the government restrictions on exports.

The farmers claim that the export quotas are preventing them from taking advantage of the high global demand and keeping prices in Argentina artificially low. The South American country is one of the biggest grain exporters in the world, and three years ago, similar protests helped push food prices around the globe to a record high.

However, the current strike is largely symbolic because the harvest this year has not begun yet. The farmers insist that keeping back their crops for one week will not result in bread shortages in the country, as mills were given enough warning and had time to stock up.

It is not expected that exports of corn, soy and wheat will be affected immediately. However, analysts believe that the protest, on the back of hot, dry weather in Argentina, will spark worries that global food prices will be pushed higher. Julian Dominguez, the Argentine agricultural minister, condemned the strike, but stated that he understood that grain farmers don't earn what they should for their crops.

The farmers' protest signals a revival of a dispute which has been ongoing between farmers and President Cristina Fernandez's government over agricultural policy. The government claims that export quotas guarantee domestic food supplies and help keep inflation low.

However, farmers' unions claim that the quotas mean Argentina loses its global market share and that they primarily benefit international commodity traders. They feel that farmers lose high amounts of money and that consumers spend more on their daily bread.