ARGENTINA: SIX-DAY AGRICULTURAL STRIKE ENDS WITH LITTLE

UNCLAS BUENOS AIRES 001410

USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO

SENSITIVE

SIPDIS


E.O. 12958: N/A
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: ARGENTINA: SIX-DAY AGRICULTURAL STRIKE ENDS WITH LITTLE
FANFARE

REF: Buenos Aires 1363


1. (U) Summary: Without the fanfare of previous strikes, the
agricultural sector ended its latest strike against GOA agricultural
policies on Wednesday, October 8 - at least for now. Compared to
other agricultural protests in the previous seven months, this
strike was a non-event, as it attracted less turnout than
anticipated/hoped by the sector. Agricultural leaders called the
strike a success in that the sector showed it can shut down
commodity sales without cutting roads. They privately recognized,
however, that the government had not been affected by the strike.
One day after the close of the six-day strike, Agriculture Secretary
Carlos Cheppi announced the reform package anticipated since last
week (Reftel). The package primarily consisted of limited subsidies
and credits, and was met with little enthusiasm by producers who
called it "more of the same." The plan did not make changes to
export taxes, as was hoped, and did not address farmers' concern
with dairy and beef cattle production issues. Farm leaders said
they will meet October 15 to determine what actions/strategy they
will adopt in the future. End Summary

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STRIKE ENDS WITHOUT IMPACT OF PREVIOUS RALLIES
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2. (U) Without the fanfare of previous strikes, the agricultural
sector ended its latest strike against GOA ag policies on Wednesday,
October 8 - at least for now. Agricultural leaders staged a final
rally in San Pedro, Buenos Aires province (the same spot where the
first strike against variable export taxes occurred in March) and a
march at the Argentine Congress to mark an end to their six-day
action.


3. (U) Rallies during the strike, as well as both closing events on
Wednesday, showed less than anticipated/hoped turnout by the sector.
Approximately 5,000 producers (almost all small farmers and members
of the Argentine Agricultural Federation (FAA)) attended the rally
in San Pedro -- a far cry from the sector's 250,000-strong
demonstration in Buenos Aires on July 15. The march on Congress
drew an estimated 2,000, including both producers and members of
leftist social organizations. Middle-class support for the rural
sector seen previously in the months-long conflict was almost
non-existent during this latest strike effort.


4. (U) Despite the limited participation in protests, agricultural
leaders called the strike a success in that the sector showed it can
shut down commodity sales without cutting roads. Cattle and grain
sales were sharply lower during the strike. Press reports indicate
that ag leaders privately recognized, however, that the government
had not been affected by the strike. In public, the ag leaders did
not speak to their concern about the limited participation, and
continued to criticize the GOA for lack of movement on their issues.


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OFFICIALS ANNOUNCE AGRICULTURAL PLAN
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5. (U) One day after the closing events of the six-day strike
(Thursday, October 9),Agriculture Secretary Carlos Cheppi announced
the reform package awaited since last week (Ref). The Plan consists
of subsidies for the agricultural sector totaling approximately 3.4
billion pesos. The money will be distributed in the form of: ARP 1
billion for credit programs; ARP 900 million for infrastructure
projects; ARP 718 million for family agriculture; ARP 300 million
for regional economic issues; ARP 250 million for the tobacco
sector; and ARP 200 million for drought assistance to producers, of
which ARP 50 million will be directed to wheat farmers and ARP 150
million for cattle farmers.


6. (U) Agricultural leaders were not surprised by the GOA
announcement and are skeptical about GOA commitment to make
fundamental changes sought by producers. Ricardo Buryaile, Vice
President of the Argentine Rural Confederation, stated that the plan
announced was "more of the same," and done "for the front page of
newspapers to make the public believe the government is helping
producers." The plan did not resolve the issue of export taxes, for
which farmers want reductions for small farmers, especially in the
wake of the current global financial crisis. GOA officials stated
that they will not make adjustments to export taxes at this time and
that to do so would be "risky" for the country due to the current
financial crisis. Buryaile also pointed out that the GOA did not
address, as was hoped and expected, the fundamental problems for
beef and dairy farmers, which according to producers are onerous
government intervention in the market and export restrictions. Farm
leaders said they would meet October 15 to determine what
actions/strategy they will adopt in the future.

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Comment
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7. (SBU) Argentina's fifth agricultural strike against GOA policies
since March shows that farmers have not/not been appeased by
Congress' rejection of the GoA's variable export tax proposal and
the limited movement to reduce export restrictions. Nor are they
happy with the recently announced subsidy package. It would
appear, however, that there has been a clear weakening of
middle-class support for the agricultural sector, perhaps due to the
distraction of a growing global financial crisis and plummeting
commodity prices. A rally of 5,000 farmers in a distant rural town
is not exactly a show of force. It would appear that the farmers
have lost much of their momentum to pressure GOA movement on their
issues, which could make a successful negotiation with the
government more difficult. End Comment.

WAYNE