Argentine Farm Tax Crisis Worsens
March 27, 2008
BBC
Blockades by farmers have led to shortages in the shops and have also hit exports, with some companies saying they cannot fulfil their contracts.
Photo: Milk tanker trucks are parked on the main highway to 9 de Julio, Argentina, Thursday, March 27, 2008, during a blockade. Striking farmers built new highway blockades around Argentina's agricultural heartland in a standoff with Argentina's President Cristina Fernandez over tax increases on major export crops. (AP /Ramon Sanchez)
Farmers say they are determined to continue with their protests.
The government says the tax increases are justified and it will use force if necessary to get food to the markets.
Rival demonstrators rallied in Buenos Aires overnight amid some scuffles.
The latest crisis was sparked by the government's decision to introduce a new sliding scale of export taxes, raising levies in some cases up to 45%.
Photo: People look at a burning combine harvester during a demonstration by Argentine farmers along a road in 9 de Julio city, southwest of Buenos Aires, March 25, 2008. Argentine farmers blocked highways on Tuesday during a prolonged strike against a government tax hike on grain exports and faced off against truckers anxious to get roads. (Reuters)
President Cristina Fernandez has refused to back down, saying the taxes are a means to raise badly-needed revenue, curb inflation and guarantee domestic supplies.
"The government is not against the farm sector. Farmers' profits have never been as high as they are today," her chief of cabinet, Alberto Fernandez, said on Wednesday.
Argentina, a leading exporter of beef, corn, soy oil and soybeans, has benefited from the recent global surge in commodity prices.
But farmers say the taxes are hitting them and their communities hard.
"Our profit margins are getting smaller and smaller. What we pay to the state is not returned to us in the form, for example, of subsidies to buy fertilizers or to promote the social and educational development of our communities," Marcelo Rasseto, a small farmer from Santa Fe province, told the BBC.
Protesters have been stopping lorries carrying farm produce and either turning them back or dumping their goods on the road.
Trade at grain and cattle markets has also been disrupted, while several suppliers of Argentine soy and soy oil to China have been unable to fulfil export contracts, industry officials told Reuters.
Photo: Butchers stand behind an empty shelf at a market in Buenos Aires March 27, 2008. Angry truckers tried to break up a farmers' road-block in central Argentina on Thursday as an escalating farm revolt over taxes that has emptied meat counters and paralyzed exports entered its third week. The farm protests against higher taxes on soy and other key exports have become a major crisis for President Cristina Fernandez, who planned to speak at a rally of supporters on Thursday to counter two nights of pro-farmer protests in the capital. The strike has halted grain exports from Argentina, an agricultural powerhouse, and is affecting soy buyers in Europe and China. Many shops and markets are reporting shortages. (Reuters)
The farmers' action has also led to meat and dairy shortages in the shops.
"The government will take the necessary measures to ensure there are no shortages... We have to guarantee people's food supplies," Economy Minister Martin Lousteau said.
Profits
The farmers' dispute also appears to have merged with more general anger against inflation and rising taxes.
"This country is fed up with taxes. Where does the tax money go," retired flight attendant Karin Sagemuner told the Associated Press in the Argentine capital.
"What they are doing to the farmers is shameful by confiscating their money."
Truck driver argues with farmers blocking a road in Tandil, Argentina on 26 March
There have been angry scenes at some roadblocks
But not everyone agrees.
Photo: Farmers attend a demonstration against Argentina's President Cristina Fernandez de Kirchner on the outskirts of Gualeguaychu, some 230 km (143 miles) north of Buenos Aires, March 26, 2008. Striking Argentine farmers vowed on Wednesday to keep up protests until the government repeals a tax hike on grains exports, undeterred by government threats to break up road blockades. The two-week-old strike has led to shortages of meat and dairy products, paralyzed local grain and livestock trade and forced major exporters of Argentine soy products to renege on some contracts, affecting buyers in commodity-hungry China. (Reuters /Marcos Brindicci)
There was a second night of demonstrations in the capital, Buenos Aires, overnight, as hundreds rallied against the government.
"Prices for basic commodities like dairy products, meat fruit and vegetables have gone up enormously in the recent months, as it is more profitable to export than to sell them in the country," said Jan Dohnke in Buenos Aires in an e-mail to the BBC News website.
"The rising export taxes are one way of trying to correct this process. In general, it seems to me that this is a protest of the well-to-do in fear of losing some of their profits."
Pro-government supporters also took to the streets and local media showed brawls between the rival groups.
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