VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #0342/01 0841212
ZNR UUUUU ZZH
R 251212Z MAR 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 3387
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 000342 
 
USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: ARGENTINE FARM SECTOR DECLARES SEVEN-DAY STRIKE 
 
REF: A. Buenos Aires 331 
 ¶B. Buenos Aires 315 
     ¶C. Buenos Aires 285 
 
¶1. (SBU) Summary:  Farm groups initiated a seven-day strike on March 
21 to protest against high export taxes and the lack of government 
support for the sector.  Producers have stopped marketing most 
grains, oilseeds, and cattle, and are blocking some highways in 
rural areas.  Support for the strike has been widespread among 
agricultural producers, who face major losses due to the recent fall 
in world prices and the extensive drought that has affected many of 
the main producing areas.  The strike was announced after producers 
were unable to win congressional agreement to reduce export taxes 
and the GOA announced that it will share 30 percent of the revenue 
from soybean export taxes with provinces and local governments, a 
move widely interpreted by agricultural producers as an effort to 
fragment the ties of provincial officials in the agricultural 
regions with the major farm groups in the run-up to midterm 
elections.  End Summary. 
 
-------------------- 
Farmers Strike Again 
-------------------- 
 
¶2.  (SBU) Farm groups started a seven-day strike on March 21 which 
will last through March 27.  During the strike, producers have 
stopped selling most grains, oilseeds, and cattle.  Producers are 
also holding protests on the highways in rural areas and in some 
cases blocking traffic, although in general the striking farmers are 
allowing movement of perishable agricultural products and 
non-agricultural products.  The strike has been widely supported by 
producers, with only 200 head of cattle entering the main Buenos 
Aires livestock market on Monday, well below the normal 4,000, and 
only limited sales taking place for grains and oilseeds. 
 
¶3. (SBU) Tensions between producers and truckers have been high in 
some of the main protest locations.  Protesting producers have 
alleged in some cases that the government has withdrawn police 
forces who were keeping the peace.  Truckers in rural areas mainly 
move agricultural products, and will be seriously affected by the 
strike.  As was the case during last year's farm strike, protests by 
truckers without work could lead to additional disruption of 
transportation throughout rural areas. 
 
¶4. (SBU) The announcement of the strike came after 100 opposition 
deputies were unable to get a quorum to hold a special session in 
Congress on lowering export taxes.  Producers are also upset that 
government will now share 30 percent of the export tax revenue with 
provinces and local governments.  Hugo Biolcati, president of one of 
the main farm groups (Rural Society), explained that producers were 
upset that the government apparently did not have money to provide 
support to farmers, but does have money available for other uses. 
He charged that the funds will be used to buy support for the 
government in the upcoming congressional elections, which President 
Cristina Fernandez de Kirchner (CFK) has asked Congress to move 
forward by four months to June 28 from October 25. (reftels B and C) 
 
 
¶5. (SBU) The main demands of the protesting producers are for 
additional assistance to producers affected by the drought, a 
reduction in exports taxes (including soybeans), and removal of 
export restrictions for beef, corn, and wheat.  They are also asking 
that the GOA implement previous agreements between the government 
and farm leaders. Agricultural producers face serious difficulties 
due to the drop in world commodity prices and an extended drought 
that has affected the main agricultural regions. 
 
---------------------------- 
OFFICIALS CRITICIZE STRIKE 
---------------------------- 
 
¶6.  (SBU) The GOA has been highly critical of the strike, stating 
that the farm groups have cast their lot with the political 
opposition against the government as the country gears up for 
mid-term elections (now expected on June 28 after the government's 
annoucement last week).  CFK and other high-level officials have 
announced that there will be no reduction in the 35 percent export 
tax for soybeans.  The GOA has also announced that it will suspend 
beef exports if domestic beef prices start to rise as a result of 
the farm strike. 
 
------- 
Comment 
------- 
 
¶7. (SBU) The start of the farm strike comes after four weekly 
meetings of rural leaders and the Interior and Production Ministers 
failed to make significant progress in meeting longstanding 
agricultural sector demands.  Farm leaders are now convinced that 
the government has no interest in reaching an agreement in advance 
of congressional midterm elections.  As has happened so often in 
this dispute, it appears that the hardliners in both the farm sector 
and the government (including former present Nestor Kirchner, who 
has been openly critical of the "oligarchic" farm sector), are once 
again calling the shots.  With the main crop harvest season just 
starting, many local contacts fear that there will be a repeat of 
the major disruptions and shortages caused by the intermittent farm 
strike that lasted from March to June 2008.  End Comment. 
 
WAYNE