December 19, 2008

Unresolved conflicts over agricultural policies in Argentina may lead to more confrontations with the government next year, according to Argentine farm leaders.

There is currently no communication between the farmers and the government, and the farmers would have to fight for their demands next year, said Hugo Biolcati, president of the Rural Society.

Aside from the lack of communication, a drought may also lead farmers to start road blockades again in 2009.

Farmers and companies are hurt by "improvised policies" and the closing of export markets to some products, said a joint statement issued by Argentina's four largest farm groups.

Earlier this month, the Argentine government has reduced wheat and corn export taxes by 5 percent to 23 percent and 20 percent, respectively. President Cristina Fernandez is also expected to announce a similar tax cut for soy and sunflower farmers on next Monday (Dec 22), said newspaper La Nacion.

However, Agrarian Federation President Eduardo Buzzi indicated that discussions on agricultural policy are pointless if it is limited to 5-percent cut on wheat and corn taxes, and if measures are taken without any discussion, consultation or consensus.

In March, farmers went on a massive strike due to agricultural export taxes introduced by the Argentine government. The on-and-off strikes, which lasted for months, caused food shortages and forced soy-importing countries to buy stocks from other soy-producing nations instead.

The crisis ended in July when Vice President Julio Cobos voted against the export tax increase following a tie vote in the Senate.