Argentine farm crisis ploughs on

24 May 2008 • by Natalie Aster

Argentina could face more protests after talks to end a tax row broke down on Thursday, reported The BBC.

Farm leaders met the government to try to end a three-month dispute over higher taxes on exports.

They are angry about new tariffs on soybeans, one of the country's biggest exports, being raised by up to 45%.

Producers claim they will be put out of business by the combination of higher taxes, transport costs and the rising cost of land.

In March, a three-week farmers strike over the soybean levy caused food shortages across the country. Farmers blocked roads, preventing trucks delivering produce to supermarkets in Buenos Aires and other major cities. The protests also hit global supplies as Argentina is the world's third biggest soybean exporter.

Its annual harvest is estimated to be worth $24bn (£12bn), the bulk of which is exported. Last year, it earned $13bn from exports of the grain.

US soybean futures rose 1% on Friday because traders are worried the ongoing dispute will threaten supplies from one of the world's most important exporters. Farm groups involved in Thursday's talks said the government refused to discuss their demand to suspend the new tax.

"The meeting was bad. The attitude is to put off an answer," said Eduardo Buzzi, head of the Argentine Agrarian Federation. Cabinet chief Alberto Fernandez said: "We will work to find a solution."

The row has dragged on for three months and has been a major test for President Christine Kirchner and her government. The economy minister, Martin Lousteau, lost his job over the crisis.

Although Mrs Kirchner has announced rebates for small and medium-sized farmers, she has refused to budge on her policy of a sliding-scale tax on exports.

She said it would boost state revenues at a time when world commodity prices are high, secure domestic supplies and redistribute wealth among its citizens.

Farmers are planning a rally over agricultural policy in the city of Rosario on 25 May to coincide with the Revolution Day public holiday.