July 3, 2008

Lawmakers from Argentina's ruling party agree on soy reform plan

Ruling party lawmakers in Argentina agreed to a proposal on Tuesday (July 2, 2008) to reform the system of export taxes that ignited months of strikes by farmers, a deputy said.

In the face of continued farm strikes which has crippled the distribution of food supplies to major cities in the nation and hampered soy exports, President Cristina Fernandez asked Congress to vote on the sliding-scale export tax regime that raised the tariff paid on shipments of soy.

The tax measure was passed earlier without Congress approval.

The new proposal was allow the current tax system to remain unchanged but only farmers harvesting more than 750 tonnes of soy would be liable for the higher taxes on exports.

This means the higher taxes would only affect 20 percent of farmers.

Fernandez previously modified the tax system to pay tax rebates to farmers that produce less than 500 tonnes.

However, it is unlikely that the reform will be enough for farmers and critics.

Farm leader Eduardo Buzzi, president of the Argentine Agrarian Federation, the spearhead of farmers' strikes, said the proposal was not what farmers were aiming for.

Opposition deputies have also launched a separate proposal to suspend the export tax regime.

The proposal by the ruling party bloc will be considered by Congress later this week.