"This is it" Analia declared in a hushed voice equal parts frustration and disbelief. "The people won't support this government's greed any longer." Analia, a middle-class Argentine who works in real estate, was reacting to the announcement from the Argentine government on 11 March 2008 that they would raise taxes on the exports of soybeans from 33% to 44%.
Along with cattle ranchers scattered across Argentina’s vast territory, Argentina’s soy farmers are one of the main driving forces behind the strength and reputation of the Argentine economy, which is known worldwide for its famous beef, and less commonly known as the worlds third largest soybean exporter. Soy, beef, grains, and other agricultural products account for billions in revenue and are Argentina’s principal exports. Many in Argentina’s middle class empathize with the plight of the farmers. “They are the backbone of this country”, Analia continues, emphasizing the belief held by many middle-class Argentines that El Campo (as Argentina’s agricultural sector is often referred to) provides the nation not only with tax revenue, inexpensive world-class beef and other food staples, but also contributes to the national character of rugged independence characterized by the Gaucho (Argentine cowboy) immortalized in the annals of Argentine film and literature.
Within hours of the announcements, the streets of Buenos Aires rang out with the sounds of people banging on pots and pans in the largest cacerolazo (mass protest involving pots and pans) since the devaluation of the peso and subsequent collapse of the economy in 2001. Mass protests soon spread to Argentina’s other large cities, especially in the “producer” provinces of Santa Fe, Entre Rios, Cordoba, La Pampa, and Buenos Aires.
Yet Analia’s indignation and the protests that followed on the streets of Buenos Aires, Rosario, Santa Fe, Cordoba, and beyond paled in comparison to the reaction of the soy farmers and other allies of El Campo. Bangning pots and pans on city streets turned into farmers parking their tractors along Argentina’s main highways to impede the transportation of soy and other commodities for international and domestic distribution. Argentine farmers and sympathizers literally blocked the highways, detaining trucks laden with soybeans, beef, grains, and other agricultural products which make up the majority of Argentina’s exports.
The strike cost the Argentine government billions of dollars in export revenus and caused food shortages and limitations of the amount of farm products, such as milk and meat, that people could buy at one given time. Between March and May of last year countless negotitations between the government and the groups and unions representing the agricutural sector yielded very little success. While the two sides fiddled at the negotiating table, violent confrontations between those against Cristina and those for her raged on and food shortages in Argentina ensued. The fledgling rule of the new Argentine president suffered. In August 2008 LatAmThought wrote a commentary questioning the viability of the new Kirchner administration as a result of the months-long strike. After Cristina’s own Vice President Julio Cobos voted against the tax hike in July 2008, Cristina had no choice but to lower the tax to 35% and was ultimately left weakened by the ordeal.
The harvest for soy occurs between March and July in Argentina. After Cobos’ vote, the conflict died down, although neither side felt like they had won. With the tax lowered to pre Mar. 11 levels, Argentina’s government looked for new ways to raise revenue, including nationalizing privatized pension funds and accepting junk bonds from Venezuela. The crisis with El Campo seemed to have been narrowly averted.
Fast-forward one year later and it becomes clear that the festering animosity had not been resolved and very little real progress had been made. Old tensions have once again sprung up, seemingly inflamed by the same problem that caused the government-agricultural sector crisis of a year earlier. On 19 March, Cristina Fernandez de Kirchner announced retentions on 30% of soybean exports to be divided among the provinces for social projects. Wary of government intervention and taxes on their crops, which have been weakened by slumping global demand and a drought, farmers have once again taken to the highways, blocking key transit points and declaring a weeklong moratorium on the sale of wheat and grain products scheduled to last until 27 March.
The announcement comes a week after Cristina Fernandez de Kirchner proposed that Argentina’s legislative elections be held in June 2009 instead of October. Critics of the government believe she is doing this in an attempt to hasten the elections out of fear of a deteriorating economic situation that will only get worse in 2009. This year’s legislative elections will determine Cristina’s ability to push through her government’s agenda, and the president needs a strong victory this year for that to happen. Cristina has until 28 March to convincve Congress to change the date, which will be the first of many tests of what remains of her political capital.
The timing of the strike is probably not coincidental. By striking now, El Campo may be countering Cristina’s tactic. Argentina’s agricultrual sector has a notoriously strained relationship with the current Argentine president. Thus, by striking months before the proposed legislative elections in June, the agricultural sector may be trying to weaken her position by emphasizing her inability to handle Argentina’s most powerful lobby and the disastrous effects that has on the nation. Stikes and the lack of production invariable causes the price of food staples in the Argentine diet to increase, which will lead to anger throughout the country. Whether Argentines vent their frustration at the polls appears to be a gamble El Campo is willing to take.