Jun 10, 2008, 19:48 GMT
Buenos Aires - The Argentine government countered an ongoing farmers' protest by promising extra funds obtained from higher export tariffs on soy will be used on a social programme to combat poverty, improve rural roads and build hospitals and homes.
The crisis marked by strikes in Argentina's powerful farming sector has been brewing since March, when an increase in export tariffs for soybeans and sunflower went into effect, tying tariffs to international market prices.
'There will be no further discussion on the issue of the tariffs,' Interior Minister Florencio Randazzo said Tuesday.
President Cristina Fernandez de Kirchner made the announcement late Monday, in a message broadcast live on television.
The average tariff on soy was increased from 35 to over 43 per cent, at the current prices. The move was initially set to apply to almost all of the surplus if the price for soybeans were to rise above 600 dollars a tonne, but the government has since modified this to set a tax ceiling.
At the current prices on world markets, the government's social programme will receive more than 1.9 billion dollars per year under the proposal.
But the move sparked controversy in Argentina Tuesday, amid complaints that the government took too long to tie the programme to the tariffs, and that the full cost falls on the agricultural sector.
Argentine Rural Society president Luciano Miguens said 'nobody can argue with the destination' of the funds, but protested that 'it is as if they had wanted to find a justification for that tax.'
'At least it is an acknowledgement by the government that that tax is unfair,' said Miguens, who denounced that it had not been agreed to with farmers.
Argentina is the third-largest producer of soybeans in the world, after the United States and Brazil. More than 95 per cent of its production is exported.
In March, a complete blockade of agricultural production caused severe food shortages in large urban areas and provoked traffic problems. In April, farmers opted to block the export of cereal and other key products, like soybeans.
In their third protest, farmers again took to the roads in late May. Although their leaders asked that they not disturb traffic, the passage of trucks carrying agricultural produce was blocked in some areas.
Cereal transport trucks in turn blockaded roads in the central provinces of Buenos Aires, Santa Fe, Cordoba and Entre Rios - in the so-called Wet Pampa - amid great tension with farmers protesting on the side of roads over the lack of work in recent months.
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