March 9, 2009

ASA Weekly: US could benefit from Argentina's farm crisis

Political tensions between local farmers and the government in Argentina could see a boost in soymeal exports from the US as buyers lose confidence in Argentine produce. 

The Argentine government described a series of agreements signed last week after a marathon bargaining session as successful, while representatives of the farming sector were more cautious, describing the accords only as a step forward. According to Eduardo Buzzi, from the Argentine Agrarian Federation and one of the four farm leaders representing thousands of growers, the conflict has yet come to an end.

This sentiment was also echoed by Argentine Rural Society head Hugo Biolcati in a televised news conference, saying "we've achieved some progress, some solutions...but we still haven't yet managed to see the results of previous government promises."

The agreements signed cover compensation for milk, grain and cattle, and came after President Cristina Fernandez de Kirchner unexpectedly joined Production Minister Debora Giorgi and Interior Minister Florencio Randazzo in the talks.

The accords, however, did not alter export taxes on soy - the area of disagreement that led farmers nearly a year ago to take to the streets in protest, blocking highways and resulting in food shortages in some areas. Argentine Rural Confederation head Mario Llambias said Fernandez would not waiver when pressed to lower export taxes on soy, reaffirming the government's position that Argentina needs the billions of dollars the taxes contribute to the economy. Llambias said farm leaders will take a proposal to cut duties to opposition members in Congress.