April 1, 2009

Argentine farmers and government leaders met again Tuesday (March 31), with both sides leaving no indication that any resolution to their long-running conflict is in sight.

However, the farmers held back from calling another strike and instead attacked the government for what they say is its neglect of small farmers in the midst of a drought and financial crisis. The last strike called by the four main farm groups, in which they boycotted grains and live cattle sales for a week, ended last Friday.

In a press conference held by leaders of the four groups, little mention was made of the long-running sticking point between the two sides - the farmers' demand for a reduction in the 35 percent tax on soy exports. Instead, they focused their demands on financial assistance for farmers whose wheat crops have been hit by the drought and for those in the most harshly affected parts of the country, such as Patagonia.

"What's in play are the futures of thousands of small and medium-sized farmers," said Pablo Orsolini, vice president of the Argentine Agrarian Federation in a television interview with Canal 5 following a press conference held by leaders of the four groups. "We had expected we would make some advances in this meeting...but unfortunately, there was no decision. I don't know if it's a lack of sensitivity, or a lack of understanding."

Interior Minister Florencio Randazzo and Production Minister Debora Giorgi held a counter-press conference - as has been routine after these weekly meetings - to rebut the farmers' claims.

Citing President Cristina Fernandez' decision to share 30 percent of its soy export tax with provinces, worth some 6 billion pesos a year (US$1.61 billion) a year at current prices, Randazzo said the government was focused on sharing wealth to those who need it.

"That ARS6 billion will go to the provinces, for water, for sewerage systems, for health facilities. But what (the farmers) want is for the ARS6 billion to go into the hands of the country's biggest producers," Randazzo said.

In fact, the decision to share the soy export duties with the provinces has been taken as a signal that the government is utterly determined not to compromise on the tax rate. Seen by critics as a political move with an eye on legislative elections on June 28, the announcement seemed to say once and for all that tax wouldn't be cut, leaving the conflict at an intractable impasse.

But while the measure has bitterly angered the farmers, it has also put them in a bind. It's not clear how far they can challenge public support with more strike actions when there's little to no sign that the government will yield on their demands. And yet there's no clear alternative way to pressure officials into reform.