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March 27, 2008

Argentinian farmers strike over increased export taxes

As a strike by Argentinian farmers continued for a 13th day Tuesday (March 25) with no solution in sight, its impact was visible on meagerly stocked supermarket shelves in cities.

Butchers and supermarkets were among the first hit.

Hundreds of Argentines took to the streets of the capital, where they banged pots and pans in support of the striking growers, who are protesting an increase in export taxes for their products.

One economist warned that the strike could result in more serious problems than short-term scarcity.

"The most dangerous [scenario] is that there might also be problems of inflation with supply, which is a type of combustible that generates more inflation," said Jorge Colina. "The fewer products and goods available to place on the shelves, the more room for increasing prices."

Argentine President Cristina Fernandez was unswayed, referring to the growers' demands as "extortion" and saying the increases on agricultural products are justified.

"It is the sector that exports almost everything," she said. "About 95 percent of soybeans are exported. They're not exported in Argentine pesos, they're exported in euros, in dollars. But the costs are Argentine costs."

The farmers' federations, for their part, announced that the strike will continue for an indeterminate period of time.

"We thought this was going to generate a conciliatory discussion, but it has had the opposite effect," said Alfredo Rodes, executive director of the Confederation of Rural Associations of Buenos Aires and La Pampa.

He said the taxes go directly to the central government, not to the provinces where the farmers live, and he accused the government of demanding "practically half" of farmers' production in taxes.

His group, which organized roadblocks, posted where they would be on the Internet.

But traffic jams still occurred, inconveniencing many people.

"They have to try to resolve this as soon as possible," one woman said. "There are kids who are trying to get to school, and they're not arriving."

CNN

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