FEELINGS are still running high in Argentina over export taxes, despite last week's government climbdown over increased duties on grain.
The Peronist government of President Cristina Fernandez de Kirchner had been seeking to increase taxes on the country's crucial exports of grains, with those on soya jumping from a fixed 35 per cent to at least 45 per cent, for example, through a sli
ding scale of new duties.
The higher taxes were allegedly intended to keep down domestic food prices, but the vast majority of Argentine farmers reckon they were no more than a means of funding public expenditure in a country where inflation is rampant.
The climbdown looks certain to calm tensions between the government and farmers after months of strikes, roadblocks and demonstrations.
But some farmers' groups said they would continue their fight. "The government took the right reading of what the senate decided, but taxes on small and medium-sized producers still need to be reduced," said Eduardo Buzzi, leader of the Farmers' Federation.
Hugo Biolcatti, a leader of the farmers' revolt, said: "Now we are going to concentrate on beef and milk, and regional economies."
Malcolm Rodman, a breeder of Aberdeen-Angus cattle who is based in Argentina and makes frequent trips to the UK, told The Scotsman:
"It is a terrible law and the government's excuse that we were planting too much soya is just nonsense."
Much of rural Argentina has been at a virtual standstill for four months. Sales of tractors have dropped by 50 per cent and those combines at least 70 per cent. Farmers have stopped investing in what is potentially one of the most productive countries in the world.
Little grain has been sold other than to meet short-term cash flow requirements, while many farmers having been sowing wheat with less that half the amount of fertiliser they would normally apply.
There has been a real sense of anger, as Rodman explained. He said: "On 25 May in Rosario 300,000 farmers and friends staged a demonstration. Some arrived in their planes, others in pick-up trucks and even some on horseback."
Last Wednesday a similar crowd gathered in Buenos Aries in another protest. The big demonstration was instrumental in forcing the government to revise its tax regime.
Rodman said: "There is nothing so emotional that hearing 300,000 singing the national anthem with such conviction. We have four farming organisations in Argentina and despite their obvious differences, they have bonded together over these past four months."
The subsequent debate and in the senate resulted in a tie, with 36 in favour of the government, the same number in opposition. Vice-president Julio Cobos, who votes only in the event of a tie, sided with the farmers. This has made him something of a hero in the countryside, according to Rodman, but quite the reverse with the ruling Peronist party.
The basic problem, and it is one common to several other countries in South America, is that while living standards are rising, so is the rate of inflation.
Beef consumption in Argentina stands at an incredible per capita figure of 64kg a year – in Scotland it is about 17kg. Relatively little Argentine beef is imported to the UK.
The latest figures show that in the first four months of this year 1,685 tonnes were imported, which pales into relative insignificance with the 63,000 tonnes from the EU over the same period.
The full article contains 582 words and appears in The Scotsman newspaper.
