Argentina shuns farm demands, unveils public works
09 Jun 2008 23:59:19 GMT Source: Reuters
(Rewrites, adds reaction from farm leaders; changes byline) By Cesar Illiano BUENOS AIRES, June 9 (Reuters) - Argentina's president unveiled a public works plan on Monday that will be funded by a controversial soy export tax, as she moved to take the upper hand in a three-month-long standoff with farmers. Farmers lifted their third strike in as many months late on Sunday, urging the government to renew talks on the sliding-scale export tax system that raised rates on the country's top crop, soybeans. But instead, center-left President Cristina Fernandez gathered government ministers, industry leaders and human rights activists at the presidential palace to announce a new program to invest in hospitals, housing and rural highways. When the export tax on soy rises above 35 percent, using the new sliding scale tied to global prices, the additional revenue will be used to finance these infrastructure projects. Fernandez criticized farmers for "refusing to contribute to the redistribution of income to those who have the least," but she also apologized for having offended anyone and urged all Argentines to join together to fight poverty. Meanwhile, some rebel farmers maintained roadside protests and grains markets were gridlocked in the country -- one of the world's top suppliers of soy, corn, wheat and beef. Eduardo Buzzi, head of the Argentine Agrarian Federation, said he hoped the president's call for unity included the farm sector so negotiations could resume. "We're waiting for the government to call us to be able to discuss things, and we're asking our friends on the highways to remain calm. We'll take our next steps with more rationality than ever," Buzzi told a televised news conference. The decision by some farmers to continue protests may make the government reluctant to negotiate with strike leaders. "The strike hasn't been lifted," Justice Minister Anibal Fernandez told local television. "There are roadblocks all over the place." UNCERTAINTY The conflict has pressured bond prices lower and seen savers rush for safe-haven dollars. It has also dented the popularity of President Fernandez, whom critics accuse of being unwilling to resolve the dispute. Truck drivers angry because the farm conflict has left some of them without work maintained several roadblocks on Monday, and no deals were done at the main grains port of Rosario due to the continued uncertainty. "There's little activity in the market. Some buyers made offers, but at a very low price because they think they won't be able to get ahold of the goods because of the conflict," said one grains trader in Rosario. Farmers had hoped the president would send them a conciliatory message during her speech, even though her government had repeatedly ruled out the possibility of changing the export taxes that triggered the dispute. The administration defends high export taxes on its crucial grains shipments as a way to redistribute wealth and fight inflation in a nation where almost a quarter of the population lives in poverty. But farmers say the taxes have become confiscatory. Under the shake-up announced in mid-March, export levies were linked to global prices, which has driven up the rates paid currently on soy and sunseed shipments. Argentina is the world's No. 3 soybean provider and its top supplier of soyoil and soymeal, and the conflict has fueled higher international prices for the oilseed. (Additional reporting by Nicolas Misculin, Maximilian Heath, Karina Grazina, Jorge Otaola and Hilary Burke; Writing by Helen Popper and Hilary Burke; Editing by Christian Wiessner)
Argentina's President Cristina Fernandez Kirchner arrives at a U.N. crisis summit on rising food prices at the Food and Agriculture Organisation (FAO) in Rome June 3, 2008. World leaders opened a ...
