Argentine Congress to debate increase in farming tariffs

Jun 18, 2008, 18:14 GMT

Buenos Aires - Argentine Chief of Staff Alberto Fernandez met with pro-government legislators Wednesday to discuss the chances of approval of a bill that would increase tariffs on farming exports - an issue that has been at the root of a farmers' strike since March.

Argentine President Cristina Fernandez de Kirchner was to speak at a pro-government rally later Wednesday in the Plaza de Mayo, in central Buenos Aires, a day after she decided to send the controversial tariff increase to Congress.

The rally was to be attended by many governors and mayors, and the president's speech was to be broadcast live on the country's television.

Farmers' leaders were evaluating their response to the latest developments in a crisis that was 99 days old. They complained that the bill could only be approved or rejected by Congress and could be debated, but no modifications were to be allowed in the wording.

Alberto Fernandez called upon farmers to put an end to their protest.

'It is not possible to persist in this scheme of road blockades and of preventing the free transit of Argentines, which generates terrible consequences, like shortages of food and fuel,' the chief of staff told Argentine radio.

The pro-government camp was worried about securing a majority for the bill, with pressure mounting on pro-Kirchner legislators - particularly those representing provinces with intense agricultural activity - to vote against the bill.

Argentine farmers launched a new strike Sunday, suspending till Wednesday the sale of grain for export. This is the fourth such strike in recent months.

The crisis has been brewing since March, when an increase in export tariffs for soybeans and sunflower went into effect, tying tariffs to soaring international market prices for food.

The average tariff on soy was increased from 35 to 46 per cent, at the current prices. The levy was initially intended 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.

Late Monday many people in Argentine urban areas engaged in so- called 'cacerolazos' - banging pots and pans - and hooting horns to demand that the government settle the crisis. The farmers' protest has been oupled with fuel and food shortages, since trucks cannot move freely through the country's roads.

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 have blockaded roads in the central provinces of Buenos Aires, Santa Fe, Cordoba and Entre Rios - in the so-called Wet Pampa - to protest over the lack of work in recent months.