Argentine farmers' ease 3-month strike as protesters agree to meet President news
23 June 2008

A three-month standoff between the Argentine government and the nation's farmers over a new variable export tax shows signs of easing, with first the protesting farmers lifting the last of their roadblocks and then the president Cristina Fernandez de Kirchner inviting union leaders for talks.

Argentine farmers have led a 103-day strike, which included roadblocks and a halt on agricultural exports, since a variable tax on grain and oilseed exports was introduced in March. This action has led to food shortages and consumer inflation throughout the country.

Road closures, export shutdowns and a sense of looming calamity have replaced the relative calm and prosperity of recent years in Latin America's third-largest economy, after Brazil and Mexico.

Scattered shortages of food and fuel have shaken consumers already anxious that rising prices and a looming energy crisis may signal a new downturn in Argentina's long history of boom-and-bust cycles.

However, in a positive development, the leaders of the four largest farmers' associations have accepted a presidential invitation for talks, sent on Saturday.

"It is a nice gesture," Eduardo Buzzi, head of the Argentine Agrarian Federation, said of the invitation. "It's an interesting opportunity. ... There is willingness there and we are going to take advantage of it."

Last week, the president said she would send the tax measure to Congress for debate, which encouraged the protesters to lift some of their road blockades. But given that Congress is controlled by Fernandez's party, some are concerned lawmakers will merely rubber stamp the tax initiative without debate.

The conflict dates to 11 March, when the president imposed a sliding-scale tax regime on farmers selling grain abroad. The major producers say they prefer to hold back their produce, even at the risk that it may spoil or they may lose sales, rather than pay duties they consider usurious.

Under the decree, duties could jump by one-third or more on soybeans; Argentina is the world's No. 3 soy producer. Taxing farm exports has become a crucial revenue source for the government.

Till now, the president has refused to roll back the more than 10 per cent increase in the taxes, saying they are needed to share soaring farm profits with Argentina's 10 million poor. Even during the talks, she is expected to stand firm on taxes but could possibly grant other concessions.

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Argentine farmers' ease 3-month strike as protesters agree to meet President