STRIKES BY AGRICULTURAL PRODUCERS AFFECT TEN

UNCLAS SECTION 01 OF 03 LIMA 002335 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV PINS EAGR ETRD CASC PE SUBJECT: STRIKES BY AGRICULTURAL PRODUCERS AFFECT TEN REGIONS REF: A. LIMA 2115 ¶B. LIMA 1707 -------------- SUMMARY -------------- ¶1. (SBU) Agricultural producers from 10 departments, all with distinct agendas, began a series of strikes and road blockages on 5/23. The GOP quickly reached an accommodation with potato growers in the south, and remains in negotiation with rice farmers from the north. Textile manufacturers and other aggrieved groups also launched demonstrations. President Alejandro Toledo's absence from the country (on a two week trip to the Middle East and China) complicates the Government's ability to deal with the protests. Acting President David Waisman has not provided signs of leadership: siding with the textile protests and challenging non-protectionist Cabinet members to resign. Agricultural Minister Manuel Manrique, in turn, blamed the Finance Ministry for not providing him with enough funds to meet agricultural producers' demands. The disturbances have not/not threatened American citizens: the Peace Corps reports that all of its volunteers in the affected regions have been contacted and are safe. END SUMMARY. -------------- STRIKES BY AGRICULTURAL PRODUCERS -------------- ¶2. (U) The strike action by agricultural producers blocked roads and closed down businesses in seven northern departments -- Cajamarca, Lambayeque, Piura, Tumbes, Amazonas, Loreto and San Martin -- and three southern departments -- Ayachucho, Cusco, and Puno. Violence has been minimal to date. Most strikes had a self-declared 48-hour time limit, although those in San Martin and in the southern deparments were termed "indefinite." The protesters pushed divergent demands. Rice farmers from the northern coast and Amazonian regions demanded that the government restrict imports, offer better planning for the rice harvest (bumper crops on the northern desert coast after two years of drought have depressed prices),and purchase surpluses from the farmers. They also charged that rice mills were colluding to pay low prices for their product (an accusation denied by the millers organization) and held demonstrations against the U.S.-Andean Free Trade Agreement (FTA). Cotton farmers in Lambayeque asked to participate in a program offered to their counterparts in Ica, whereby the GOP subsidizes producers affected by imports. Potato growers from Ayacucho demanded that the GOP buy up their surplus production. Finally, a number of groups requested that the GOP expand the credits offered by the GOP's Agricultural Bank. ¶3. (SBU) Agriculture Minister Manrique reached an accord with potato farmers in Ayacucho on 5/24, under which the GOP will buy up over 4,000 tons of potatoes from Ayacucho area growers (about 4 percent of Ayacucho's potato production), half of which would be used in the upcoming Potato Festival in Lima (May 27-30). Negotiations are ongoing in Lima with San Martin Regional President Julio Cardenas. Polcouns, on 5/25, spoke with APRA Congressman Aurelio Pastor, who had flown to San Martin two days earlier to touch base with constituents and participate in talks with the GOP. Pastor said that the situation in San Martin was peaceful, and that he was flying back to Lima to take part in negotiations there. He added that he did not/not expect the strike to be resolved until the weekend, as any agreement reached in Lima would have to be ratified by strike leaders in his department. -------------- Others Jump On Protest Train -------------- ¶4. (U) Other disaffected or politically motivated groups have joined the protest bandwagon: -- Between 3,500 and 4,000 textile manufacturers and their employees organized a march in Lima on 5/24, demanding higher tariffs on Chinese imports. They met with congressmen and with Acting President Waisman, whom they said endorsed their call for enhanced protection measures. Vice Minister of Industry Antonio Castillo, however, cautioned that additional import "safeguards" could only be imposed after a survey of textile producers is carried out in late June (to be reported septel). -- Seven thousand nurses in public hospitals and clinics also began an indefinite nationwide strike on 5/24. Press reports indicated that nurses were not available for most routine functions in Lima-area clinics, though nurses attached to emergency rooms were reporting to work. -- In Espinar, Cusco Department, left-wing anti-mining, anti-APRA groups also rode piggyback on the farmers' actions. A crowd of 1500 made up largely secondary school and university students attempted to enter the Tintaya Mine on 5/24. They were repelled by Police, but the mine has been temporarily closed by its owner, Australian company BHP Billiton. Ironically, the Tintaya Mine has distinguished itself for its flexibility and willingness to work with both the NGO Oxfam America and local communities in a promising dialogue table established in 2002 (Ref A). Oxfam reps told Poloff that the protest was the product of area left-wing groups who opposed the local Mayor, a member of the APRA Party, who was party to a 2003 agreement with the mining company to promote local development. -- Local villagers in Puno blocked access to the islands of Lake Titicaca, compelling 10 boats with more than 200 tourists to abandon plans to visit those areas. The protesters rejected the recent designation of the lake and its island as a natural reserve, which they alleged prevents them from fully using the area's natural resources. -------------- LEADERSHIP QUESTIONS -------------- ¶5. (SBU) With President Toledo out of the country on a two-week trip to Asia and the Middle East, the GOP has not/not demonstrated leadership in addressing the strikes and road blockages. Acting President Waisman has yet to comment on the strikes, although he did voice his support for increased protection for Peruvian textile manufactures and challenged anti-protectionist ministers to submit their resignations to President Toledo upon the latter's return. Agriculture Minister Manrique was able to settle the Ayacucho potato growers strike, using funds that appear to have already been earmarked to purchase supplies for the "Potato Festival." Manrique, however, basically threw up his hands at resolving the other agricultural protests, complaining that the Finance Ministry has not/not provided him with the financial resources needed to address agricultural needs and demands. -------------- POLITICAL INFLUENCE? -------------- ¶6. (U) Labor Minister Juan Sheput, on 5/24, claimed that the strikes and road blockages were largely motivated by unidentified anti-government parties. Opposition APRA party Congressman (and party co-Secretary General) Jorge del Castillo then played into Sheput's hands when he criticized Toledo for leaving the country without leadership when it was "boiling." -------------- NO REPORTS OF AMERICANS IN TROUBLE -------------- ¶7. (U) The Embassy has not/not received any reports of Americans in trouble as a result of the strikes. Three of the ten affected regions -- Piura, Lambayeque and Cajamarca -- house Peace Corps volunteers. All are safe and accounted for. Only the Piura volunteers have found that the strike affects their work. They have been instructed to stay at home during the duration of the farmers' action. -------------- COMMENT -------------- ¶8. (SBU) While the agricultural protestors have diverse interests and demands, they appear to have effectively organized a coalition of the disaffected and even attracted additional groups (textile manufacturers) to ride their coat-tails. With Toledo out of the country, the GOP so far has been at a loss how to respond to the demonstrations and road blockages. This may not prove damaging if most protests end after 48-hours, as planned. If not, then the GOP may be forced to declare a State of Emergency, as it did in May 2003, when striking agricultural producers shut down much of the interior. This could result in Toledo cutting short his foreign travel. The demonstrations by rice farmers will likely be the most difficult to resolve: domestic overproduction coupled with imports (mostly from Uruguay, which Peru's agreement with MERCOSUR shields against protectionist measures) has depressed prices, particularly for producers in San Martin and Amazonas. If past patterns hold, we can expect that the GOP will try to mollify the aggrieved with minimal concessions and promises to address fundamental issues in the future. STRUBLE