VZCZCXYZ0003
RR RUEHWEB

DE RUEHBU #0314/01 0781734
ZNR UUUUU ZZH
R 191734Z MAR 09 ZDK
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3347
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 000314 
 
USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: Argentina:  Farm Dispute Marks An Unhappy First Anniversary 
-- With No End In Sight 
 
Ref:  (A) Buenos Aires 0246, (B) Buenos Aires 0214, (C) Buenos Aires 
0285 
 
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SUMMARY 
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¶1.  (U) The conflict between the Argentine government and the farm 
sector is now over a year old, with no sign of a solution.  On 
Tuesday, March 17, the GOA and the farm sector met for a fourth 
round of discussions on agricultural policy issues.  Early rumors 
indicated that the government, eager to reach an accommodation prior 
to likely early mid-term elections in June, would lower export taxes 
on almost all commodities for small producers.  However, farm group 
leaders came out of the meeting empty-handed.  Opposition 
parliamentarians will hold a special meeting in the Lower House on 
Thursday, March 19 to demand that Congress resolve the export tax 
issue.  However, they appear far short of the quorum needed to 
convene a special session to consider legislative options that would 
reduce export duties on soybeans and other major commodities. 
 
¶2. (SBU) The third round of talks between the GOA and farm leaders 
on March 10 also ended with few advances, and with farm leaders 
accusing the GOA of not fully implementing previous agreements. 
Unhappy with GoA intransigence, farm leaders called for a gathering 
and demonstrations on the sides of major highways on March 12 to 
mark the passage of one year since the beginning of their dispute 
with the GOA over export taxes and agricultural policy.  The GOA 
unveiled additional measures to assist regional products, with a 
fiscal cost of US$390 million, and implementation of agricultural 
emergency measures in 18 zones, but the announcement fell far short 
of producers' expectations.  The GOA reiterated, however, that it 
would not meet the producer's principal demand, a reduction in 
export taxes for grains and oilseeds, nor would it introduce a 
program to reduce export taxes for medium and small producers.  End 
Summary. 
 
¶3. (SBU) On Tuesday, March 17, the GOA and the farm sector met for a 
fourth round of discussions on agricultural policy issues.  Early 
rumors indicated that the government would lower export taxes on 
almost all commodities.  However, farm leaders came out of the 
meeting empty-handed.  The government indicated that they would not 
give any concession on export taxes on major commodities, and 
reiterated that its claim that it had already provided significant 
help to the sector in the past six months.  The government also 
encouraged/challenged producers to continue their efforts in taking 
this matter to Congress.  Both sides agreed to meet again in two 
weeks' time to continue talks.  Based on the latest political 
developments and reactions, Post contacts are not optimistic that 
advances will occur in the near future.  Furthermore, some press 
reports speculate that this past meeting could have been the last 
meeting between farm leaders and the GOA for some time. 
 
¶4. (U) In light of the fact that there have been no advances in 
cutting export taxes on soybeans and other major commodities -- 
considered essential by producers -- the farm entities have backed a 
producer protest on the sides of major highways to express 
discontent.  Farm leaders are concerned that the lack of significant 
results from recent meetings with the government is creating strong 
pressure among producers throughout the country.  They are afraid 
that the more radical "self-convoked" producers, who do not 
necessarily adhere to the protest strategy of the rural entities, 
could launch maverick measures without the consensus of other 
producers.  In fact, many self-convoked producers in the main 
producing provinces made intermittent roadblocks at 30-some sites 
after the lackluster outcome of the March 17 meeting.  Producers 
will continue to protest on the sides of roads until Thursday, March 
19, when the opposition will hold a special meeting in Congress to 
address the export tax issue. 
 
¶5. (U) Unhappy with GoA intransigence, farm leaders had previously 
called for demonstrations on the sides of major highways and held a 
major gathering on Thursday, March 12, in Cordoba province to mark 
the passage of one year since the beginning of the rural conflict. 
At that meeting, which was attended by many opposition leaders, the 
sector officially presented its document, "The Farm Sector's 
Contribution to Politics."  That document outlines the sector's 
position on agricultural policy issues related to taxes and exports. 
 
 
¶6. (SBU) The rural entities and the GOA had met with higher hopes on 
Tuesday, March 10, to continue working on policies to alleviate the 
sector's difficult economic situation -- following a seemingly 
fruitful meeting on March 3 (ref A), which both the government and 
farm leaders described as positive.  However, the four-hour long 
 
meeting did not produce the expected results.  The GOA expressed 
surprise and frustration at the farm sector's reactions.  The rural 
entities mentioned after the meeting that discussion on two key 
points, drought relief and export taxes, had not advanced, and there 
was no improvement to their situation.  Although the government 
highlighted the speed at which it had worked to publish resolutions 
on the agreed measures, farmers accused the GOA of changing and 
omitting key points of the agreement.  Producers' lobby groups also 
showed disappointment and distrust following threats made by the 
Secretary of Commerce, Guillermo Moreno, to meat packers and buyers 
at the Liniers cattle market that he would not allow buyers to pay 
higher prices, despite the fact that the GOA's agreed measures 
focused on encouraging higher prices for producers. 
 
¶7. (U) Far short of meeting farmers' expectations, the GOA announced 
additional measures to assist regional products, with a fiscal cost 
of US$390 million, and implementation of agricultural emergency 
measures in 18 zones in Argentina, and promised to sign several 
emergency requests due to the severe drought suffered in most of 
¶2008.  It also said that it is working with some governors to lower 
export taxes on honey -- by using half of the current tax income for 
a "honey strategic program".  The GOA also indicated that wool 
producers in the southern provinces will also have export taxes 
reduced by half - by using half the current tax revenue from wool 
exports to partially offset workers' salaries in the next three 
months.  Finally, the GOA indicated that a bill on meat 
commercialization will soon be passed, although no expected date was 
announced. 
 
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Comment 
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¶8. (SBU) The year-old conflict between the farm sector and President 
Cristina Kirchner remains unresolved.  It appears that, due to the 
unwaveringly firm stances of both sides, resolution of this conflict 
is most likely to come from Congressional involvement.  The 
opposition is attempting to hold a special meeting in the Lower 
House on Thursday, March 19, to demand that Congress address the 
export tax issue.  However, the opposition is short of the number 
required to convene a special session.  Press reports indicate that, 
currently, approximately 100 congressmen support the ag sector; but 
a minimum of 129 is needed to meet quorum requirements.  In 
addition, the farm lobby sector has indicated that the government's 
proposal to move up mid-term congressional elections (from October 
25 to June 28, per ref C) will likely delay its strategy to push for 
a Congressional decision on export taxes.  Moreover, former 
president Nestor Kirchner said in a March 17 speech that voters in 
the upcoming congressional elections can factor into their electoral 
decisions how to address the concerns of the agricultural sector. 
Indeed, there has been much media speculation that the sudden onset 
of congressional campaigns will effectively marginalize the farm 
protests until the elections conclude. 
 
WAYNE