Argentine Export Policy Hits a Roadblock
Fury Follows President's Increase of Agricultural Taxes
By Monte Reel
Washington Post Foreign Service
Thursday, March 27, 2008; A10

BUENOS AIRES, March 26 -- It began as a modest clatter, but within minutes the noise grew into a deafening racket as thousands of people spilled out of their homes Tuesday night, banging on pots and pans.

In a country well positioned to benefit from unprecedented international demand for its abundance of soybeans and beef, the arrhythmic uproar was the sound of a population deeply divided over what to do with potential profits. The residents were protesting a tax increase on agricultural exports -- a policy that has thoroughly inflamed tensions between 's private sector and the government of President .

"This government only takes. The money never comes back," said Ines Conelo, 60, who had joined the impromptu demonstration by beating on a pot from the balcony of her apartment. "It has gone too far. I'm 100 percent in agreement with the farmers on this one."

For the past two weeks, Argentina's agricultural producers have been on strike, protesting export taxes on soybeans that have jumped from about 27 percent to more than 40 percent since Fernández de Kirchner took office in December. Argentina is the world's third-largest exporter of soybeans, behind the United States and .

Farmers and their supporters have blocked roads and ports throughout the country, and some supermarkets have run out of such staples as beef and milk. The shortages have dragged the whole country into the fray.

In a speech to the nation late Tuesday, Fernández de Kirchner ruled out the possibility of government concessions. The higher taxes are designed to keep more agricultural products in Argentina, protecting domestic supply and curbing inflation. The increased revenue would pay for infrastructure improvements, she said.

But the speech seemed to stoke tensions to new highs. She said the government -- led previously by her husband, Nástor Kirchner -- has helped prop up the nation's farm economy by subsidizing fuel and by purposefully weakening the Argentine peso against the U.S. dollar. Accusing the farmers of greed, she ridiculed their demonstrations by contrasting them with those that occurred after thousands of Argentines lost their savings after the 2001 economic collapse.

"Those were demonstrations of misery and tragedy for Argentines," Fern¿ndez de Kirchner said of the street protests during the financial crisis. "This past weekend allowed us to see the other side, what I call the demonstrations of abundance, the demonstrations of the most profitable sectors. Argentina has changed, and it has transformed itself from tragedy into this, which seems a step away from a comedy."

The speech touched a raw nerve among many here. Rising inflation in recent months has fueled concerns that Argentina might not be doing as well as its president claims. Immediately after the speech, the percussive chorus of pots and pans began to fill the streets, as thousands showed solidarity with the farmers. Some of the most active demonstrations took place in the city's most affluent neighborhoods, where Fern¿ndez de Kirchner is widely opposed.

Near midnight, counter-protesters led by Luis D'Elia -- a former government official who regularly organizes demonstrations backing the Kirchners -- scuffled with supporters of the farmers.

Cabinet Chief Alberto Fernández said Wednesday morning that many of the anti-government protesters do not understand the root of the conflict, which he said is about spreading the country's wealth to a larger percentage of its population.

"We aren't the ones that started this situation," Fernández said in a radio interview with Argentina's Global Station. "It was started by the people of the agricultural sector."

Tensions between private industry and the Kirchners have been simmering for years. regularly pressured corporations to keep their prices low during his term. He asked Argentines to boycott gasoline when the company tried to raise prices. He also called on Argentines to stop eating beef so farmers would drop prices; in 2006, he instituted a ban on beef exports to force producers to sell their product at home.

With both the government and the farmers seemingly digging in for a protracted battle, residents here flocked to supermarkets Wednesday morning to find that some shelves had already been plucked bare. At one supermarket, gray curtains hung in front of meat counters that remained empty because of the strike.

Across the street, at a small butcher shop, the proprietor stood alone behind the counter and could not attract a customer. All he had to offer was chicken.

"The workingman cannot get ahead in this country, because the government takes everything away -- and they use the money to pay piqueteros to demonstrate against anyone who opposes them," said a 71-year-old butcher who gave only his first name, Mario, saying he feared being fined by the government for speaking against it.

Delia Gutierrez, 80, was one of the many Buenos Aires residents who waited in long checkout lines Wednesday to stock up on milk and vegetables.

"I think this whole country is carried on the backs of the people in the country, but I think both sides in this conflict are being too rigid," she said.

Like many others, her views echoed a sign posted on the door of the supermarket where she shopped. Apologizing to customers for the shortages, the store managers wrote, "We sincerely hope for a prompt resolution to this conflict."

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