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

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SUMMARY
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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.

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STRIKES BY AGRICULTURAL PRODUCERS
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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.

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Others Jump On Protest Train
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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.

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LEADERSHIP QUESTIONS
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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.

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POLITICAL INFLUENCE?
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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."

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NO REPORTS OF AMERICANS IN TROUBLE
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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.

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COMMENT
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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