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Farmers, Govt clash in Argentina

Argentine farm leaders said they felt cheated at a Thursday meeting with the government to try to end a three-month conflict over soy export taxes, but government officials said talks were fruitful.

world Updated: May 23, 2008 12:27 IST
Fiona Ortiz

Argentine farm leaders said they felt cheated at a Thursday meeting with the government to try to end a three-month conflict over soy export taxes, but government officials said talks were fruitful.

It was the second time since March that both sides have started talks to try to resolve a political crisis over the new soy tax.

Farm protests paralyzed grain exports from Argentina -- a major world supplier of corn, soy, wheat and beef -- in March and part of May.

"The meeting was bad. The (government) attitude is to put off an answer," said Eduardo Buzzi, head of the Argentine Agrarian Federation, one of the four farm groups that met with top government officials for 90 minutes.

Buzzi said he and the other leaders felt "cheated" because they wanted to discuss on Thursday their central demand, that authorities suspend the new soy tax, but the government put off that topic until next week.

May 25 is Revolution Day in Argentina, an important public holiday, and the government plans a big public act to fortify support for its policies, such as the new tax.

Farm groups are planning a huge rally the same day in the city of Rosario to protest agricultural policy.

Cabinet Chief Alberto Fernandez characterized the talks as fruitful, and said the government had agreed to talk about the tax and about soy producers' complaints that it could distort trade on the grains futures exchange.

President Cristina Fernandez de Kirchner has defended the sliding-scale soy export tax as a mechanism to distribute windfall profit from soy at a time of high world prices for commodities, both for food and for biofuels.

Cabinet Chief Fernandez said talks next week will focus on the functioning of futures markets and that technical groups will be formed.

"We will work to find a solution," the cabinet chief said in a news conference, where he did not take questions.

Fernandez reiterated the government's previous offer of tax rebates for small producers and of transportation subsidies for soy growers far from ports.

He said those measures would compensate 80 percent of growers for the new tax.

Fernandez said it was strange that a very small number of producers had asked for the rebates and the subsidies so far. He said that may be because a lot of small producers are not properly registered businesses.

Farmers have complained that the government has held up beef exports since the March farm strike, by asking for more than the usual paperwork at customs.

Beef exports are getting back to normal, Fernandez said, but he added that the government is rejecting export petitions from companies that are not following rules regarding supplying the domestic market with certain beef cuts and government-set maximum prices.

Farmers have also complained that the government has refused to reopen wheat export registries, which have been shut for months.

Fernandez said that the "wheat issue is very hard to resolve." He said the government does not want to allow wheat exports until it is completely sure that 6 million tonnes of the 16 million tonne crop will stay in the country.

The cabinet chief said 1 million tonnes of wheat is still missing and said that had to do with the informal way the agricultural sector works.

"We all agree the excess should be allowed to be exported, but we don't want to allow tax evasion," he said.

"The sector operates with a high degree of informality and that must be corrected," he said.

(Reporting by Fiona Ortiz; Editing by Gary Hill)