VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0208/01 0501935
ZNR UUUUU ZZH
R 191934Z FEB 10
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0579
INFO MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS BUENOS AIRES 000208 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EAGR ELAB EFIN AR
SUBJECT: Argentina: Farmer Demonstration Against Agriculture Policy 
Brings Some Changes 
 
Summary and Comment 
 
-------------------------------- 
 
 
 
¶1.  (SBU)  A February 17 demonstration by farmers in Chab????s, Santa 
Fe province, protesting the government's agriculture policies has 
brought about welcome policy changes.  That evening, hoping to 
defuse the situation and avoid another all-out strike and sales 
boycott by farmers, Minister of Agriculture Juli????n Dom????nguez, 
and 
the President of ONCCA (Argentina's Agricultural Trade Control 
Office), signed off on freeing up 10 million tons of corn, and 1 
million tons of wheat, for export, prior to a February 18 meeting 
of the agricultural sector's Liaison Board to decide future protest 
actions.  That move seems to have appeased farm leaders who decided 
to put strike measures on hold.  In addition, on February 18, 
Minister Dominguez, and Buenos Aires Governor Daniel Scioli, 
announced new subsidies for the cattle and meat sectors totaling 
more than AR$55 million, destined for 73 municipalities in the 
province.   The recent GOA actions to allow more grain sales and 
provide assistance to the cattle sector are steps in the right 
direction that will likely alleviate mounting pressures on markets 
and the sentiment of disgruntled farmers - at least for now, as 
producers are now likely to focus on export restrictions for beef 
and other issues.  End Summary and Comment. 
 
 
 
Farmers Demonstrate Against Export Cuts 
 
--------------------------------------------- ---------- 
 
 
 
¶2.  (SBU) A February 17 demonstration by farmers in Chab????s, Santa 
Fe province, protesting the government's agriculture policies, has 
brought about welcome policy changes.  The demonstration was led by 
the Argentine Agrarian Federation (FAA) with the participation of 
more than 600 producers, truck drivers and other locals.  Farm 
sector producers from other parts of the country participated as 
well.  Vocal farm leader Eduardo Buzzi, head of the Argentine 
Agricultural Federation (FAA), said that he wanted to continue to 
negotiate with the GoA, but threatened strikes if no positive 
results were achieved.  The demonstrators were protesting against 
the possibility that the government would cut exports to encourage 
lower domestic prices.  Buzzi said that if the GoA pursued such a 
policy, there could be dire consequences, such as a food sales 
boycott.  He highlighted the need to increase the number of corn 
export permits, to improve wheat prices for producers, and to 
establish lines of communication to discuss livestock policies. 
 
 
 
GoA Agrees to Increase Exports 
 
------------------------------------------- 
 
 
 
¶3.  (SBU) That evening, hoping to defuse the situation and avoid 
another all-out strike and sales boycott by farmers, Minister of 
Agriculture Juli????n Dom????nguez, and the President of ONCCA 
(Argentina's Agricultural Trade Control Office), signed off on 
freeing up 10 million tons of corn, and 1 million tons of wheat, 
for export, prior to a February 18 meeting of the agricultural 
sector's Liaison Board to decide future protest actions against the 
onerous government policies.  That move seems to have appeased farm 
leaders who decided to put strike measures on hold. 
 
 
 
New Cattle and Meat Subsidies 
 
----------------------------------------- 
 
 
 
¶4.  (SBU)  In addition, on February 18, Minister Dominguez, and 
Buenos Aires Governor Daniel Scioli, invited Buzzi and other farm 
leaders to a meeting during which they announced new subsidies for 
the cattle and meat sectors totaling more than AR$55 million, 
destined for 73 municipalities in the province. 
 
 
Comment 
 
 
 
¶5.  (SBU)  The recent GOA actions to allow more grain sales and 
provide assistance to the cattle sector are steps in the right 
direction that will likely alleviate mounting pressures on markets 
and the sentiment of disgruntled farmers - at least for the short 
term, as producers are now likely to focus on export restrictions 
for beef.  According to livestock experts, stockbreeding was 
severely impaired by the worst drought in 70 years, and combined 
with counterproductive government policies, concerns about 
Argentina's declining cattle herd are real.  The announced 
subsidies will likely create incentives for farmers to increase 
herd size.  The wheat market also faces difficulties, as supply 
vastly exceeds demand and open exports are necessary to sell excess 
supplies.  The announcement of one million additional tons for 
export should suffice to complete USDA's projected 4 million tons 
of exports for this crop year if current production forecasts hold. 
Additionally, the 10 million tons of corn released for export 
should cover the 9.5 million ton forecast for the crop year. 
Although these announcements are steps in the right direction, 
several issues such as export restrictions on beef will continue to 
create contention between the agricultural sector and the GOA. 
MARTINEZ