VZCZCXYZ0036
RR RUEHWEB

DE RUEHBU #1171/01 2322032
ZNR UUUUU ZZH
R 192032Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1843
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 001171 
 
USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON AR
 
SUBJECT:  ARGENTINE FARM LEADER LUCIANO MIGUENS COMMENTS ON FARM 
DISPUTE 
 
¶1. (SBU) SUMMARY:  The Ambassador met with Luciano Miguens, 
President of the Rural Society of Argentina (SRA), during the 
Palermo Livestock Show in Buenos Aires city.  Miguens gave his views 
on the recent farm strike and its political and economic impact. 
While pleased that the government had repealed the controversial 
variable export tax, Miguens noted that the government implemented 
numerous new regulations during the farm dispute which have 
increased controls and limitations on the sector.  He stated that 
the farm groups have a good relation with newly appointed Secretary 
of Agriculture Carlos Cheppi, but the latest government actions 
indicate that the farm problem is not resolved.  END SUMMARY 
 
¶2. (SBU) The Ambassador met with Luciano Miguens on July 31 at the 
annual Palermo Livestock Show in Buenos Aires to discuss 
developments in the agricultural sector.  As president of the SRA, 
the oldest farm organization in Argentina, Miguens was part of the 
four member commission (Mesa de Enlace) that represented the rural 
sector during the farm strike and in subsequent discussions with the 
government.  Widely considered one of the more moderate agricultural 
representatives, Miguens was concerned about the future direction of 
government policies towards the sector.  The government boycott of 
participation in the traditional Palermo Livestock Show served to 
highlight the ongoing differences between the GOA and the farm 
sector.  While the GOA agreed to withdraw the variable export tax 
after it was defeated in Congress, Miguens noted that other measures 
introduced during the course of the farm strike to limit exports and 
control the agricultural market remain in place. 
 
---------------------------- 
Beginning of the Farm Strike 
---------------------------- 
 
¶3. (SBU)  Miguens described as unbelievable and unnecessary the farm 
crisis created by the government in March 2008 when it issued 
Resolution 125.  The resolution created a sliding scale for export 
taxes on grains and oilseeds, which in the case of soybeans, went 
from 35 percent to over 44 percent and above.  Miguens said that 
instead of taking advantage of the world's strong demand for 
agricultural commodities, the government took measures to discourage 
production and reduce exports.  The country lost more money during 
these four months as a result of the farm dispute than what the 
government aimed to collect with the new tax increase. 
 
----------------------------------- 
Pessimistic over Government Signals 
----------------------------------- 
 
¶4. (SBU)  When asked if he considered the farm problem overcome 
after the Senate voted against Resolution 125, he seemed 
pessimistic.  A week after the government's defeat in Congress, the 
newly appointed Secretary of Agriculture, Carlos Cheppi, stated that 
he would only receive the farm organizations individually and not as 
a group (the Mesa de Enlace).  Cheppi did not invite the farm groups 
to his swearing in ceremony and immediately announced that he would 
not attend the official inauguration of the Palermo Show, as most 
Secretaries have done in the past and even most Presidents.  The 
government also lifted all official stands at the show and convinced 
several provincial governments to do the same.  At the time the 
meeting took place, the Secretary of Agriculture had not called the 
farm sector leaders to a meeting. (The invitation came a week later 
and he did receive all farm leaders.) 
 
-------------------------------- 
Unity of the Farm Sector was Key 
-------------------------------- 
 
¶5. (SBU)  Miguens highlighted the importance of having the four most 
representative farm groups continue working together on common 
problems and lobbying the government to develop a comprehensive 
policy for the farm sector.  Despite different political and 
economic leanings among the farm groups, the farm groups united in 
response to the government's tax pressure, increased controls and 
marketing limitations, and the lack of long term agricultural 
policies.  He also indicated that the government tried, to no avail, 
to break the unity of the farm groups by offering separate measures 
for small producers and those in more remote regions.  Miguens said 
he expects the farm organizations will continue to work together, 
although he felt that trying to create an official unified farm 
entity could bring more problems than solutions. 
 
------------------------------------ 
Urban Support for the Farm Sector 
------------------------------------ 
 
¶6. (SBU)  Miguens also told the Ambassador that during the farm 
strike the agricultural sector was surprised by the strong support 
received from the public in large cities.  Much of this support was 
a result of the government's poor management of the crisis.  The 
farm sector now realizes the importance of working closely with 
politicians, especially rural town mayors, and senators and 
congressional representatives.  When asked what he thought would 
happen in next year's mid-term elections, Miguens indicated that one 
of the farm's sector main challenges is to maintain this strong 
support through October 2009. 
 
------------------------------------------- 
Carlos Cheppi, New Secretary of Agriculture 
------------------------------------------- 
 
¶7. (SBU)  Miguens described newly appointed Secretary of Agriculture 
Cheppi as a good technician well known to the farm sector.  As 
former president of INTA (the National Institute of Agricultural 
Technology), the major farm groups had worked closely with him in 
the past.  He mentioned that Cheppi had developed a good relation 
with Venezuela while directing INTA projects to provide agricultural 
technical advice in Venezuela. 
 
------------------------------- 
More Controls, More Limitations 
------------------------------- 
 
¶8. (SBU)  Miguens stated that once the Palermo show was over, the 
farm organizations would start focusing on addressing the numerous 
measures that the government, mainly through ONCCA (the National 
Control Entity for Agricultural Commercialization), had implemented 
during the last four months of the farm strike.  New regulations 
gave the government greater authority to control exports across a 
broad range of agricultural products.  The government is using these 
regulations restrict exports and keep down the domestic price of 
beef, dairy products, corn, wheat and other agricultural products. 
Miguens' SRA is also concerned about legislation being prepared in 
the Congress, which would create an official entity with the power 
to buy and sell agricultural commodities. 
 
------------------------ 
Rural Society of Argentina 
------------------------ 
 
¶9. (U) The SRA was created in 1866 to represent the traditional 
large landowners of Argentina.  It currently has almost 10,000 
members, mostly devoted to livestock production and farming. 
Miguens will finish his second term in September and will be 
replaced by Hugo Biolcati, current vice president.  The SRA played a 
key role as one of the members of the Mesa de Enlace, the joint 
group of the four most important local farm groups (together with 
Confederaciones Rurales Argentina, Federacion Agraria Argentina and 
Coninagro), during the 4-month long farm strike. 
 
¶10. (U)  At the end of the meeting, Miguens thanked Ambassador Wayne 
for his visit.  Both noted the importance of having good relations 
between neighbors, since the SRA's Palermo show fairground borders 
the Embassy. 
 
------- 
COMMENT 
------- 
 
¶11. (SBU) Comment: The repeal of the variable export tax in July was 
not the end of the differences between the GOA and the farm sector. 
The farm groups are now pushing to address other concerns at a time 
when the GOA seems to be determined to maintain strong controls over 
the strategic agricultural sector.  The GOA has decided to back off, 
at least for now, on increasing agricultural export taxes, but this 
and other issues are likely to be at the forefront of relations 
between the rural sector and the government between now and the 
legislative elections in 2009.  End Comment 
 
WAYNE