ARGENTINE AGRICULTURAL SECTOR ON STRIKE

UNCLAS BUENOS AIRES 000368 SIPDIS SIPDIS SENSITIVE TREASURY FOR LTRAN AND MMALLOY E FOR THOMAS PIERCE PASS USTR FOR DUCKWORTH USDOC FOR 4322/ITA/MAC/OLAC/PEACHER US SOUTHCOM FOR POLAD E.O. 12958: N/A TAGS: EAGR ECON ENRG EPET AR SUBJECT: ARGENTINE AGRICULTURAL SECTOR ON STRIKE Reftel: (A) Buenos Aires 00328 -------------- Summary -------------- ¶1. (SBU) Argentina's agricultural sector has organized protests -- during which no commodities have been sold -- in opposition to changes announced by Economy Minister Martin Lousteau to Argentina's agricultural export tax scheme (Ref A). Roadblocks have disrupted travel across a large part of the country. Protests are expected to continue into next week and food shortages are expected to begin next Tuesday. Argentine public opinion is divided, with almost half supporting the agricultural sector. Government officials publicly indicate that they will not revise the tax policy decision. END SUMMARY. -------------- --- Strike is continuing through the Holiday Weekend -------------- --- ¶2. (U) To protest changes to Argentina's agricultural export tax regime that were announced last week by Economy Minister Lousteau (Ref A),Argentina's four major agricultural producer entities (Sociedad Rural, CRA, Coninagro and FAA) have instigated and supported a widespread lockout by the sector (since March 13) during which no commodities are being sold and roadblocks have disrupted travel across a large part of the country. Although the strike was initially planned for two days, the entire agricultural sector has extended the protests for more than seven days, and they will likely continue the action beyond the "Semana Santa" holiday weekend. Post contacts report that roadblocks and protests are expected to continue throughout the long weekend, despite assurances from the agricultural sector that holiday travelers will not be affected. The four groups have agreed to meet again on Monday, March 24, to determine if they will continue to support the strike. -------------- Roadblocks Abound -------------- ¶3. (U) The four agricultural entities have organized protests in more than 70 points across the main agricultural region of the country. Roadblocks have occurred in the provinces of Buenos Aires, Santa Fe, Cordoba, Entre Rios, La Pampa, as well as the northern provinces of Salta, Formosa and Santiago del Estero. Post contacts have reported that protestors in Cordoba have, in some situations, seized trucks and railcars of grain headed to market, and dumped the contents onto the highway and rails. The Embassy sent a warden message warning of the roadblocks March 20 to U.S. citizens throughout Argentina. -------------- Food Shortages Expected -------------- ¶4. (U) Producers have shown solidarity in boycotting sales of agricultural food products. On Tuesday, March 19, reports indicate that only 95 cows entered the Liniers slaughter market, Argentina's largest. On a typical day, that volume would reach 10,000. The following day, no cattle were sold at all. Gustavo Freixas, Director of the Argentine Cattle Brokers' Association, predicts that meat shortages will begin by next Tuesday. In addition, the president of the Argentine Agrarian Federation (FAA),Eduardo Buzzi, has been quoted that certain breads could also soon become in short supply. -------------- Reactions -------------- ¶5. (U) Local media surveys of the urban population show that about fifty percent of the public supports the agricultural producers, while the other half agree with the government's decision to add taxes on the sector. Government officials have publicly stated that they will not revise the tax system. Cabinet Chief Alberto Fernandez stated publicly that agricultural producers "extort the people and make them suffer because they [producers] feel they have the right to keep enormous profits that all Argentines facilitate for them." Fernandez was also quoted as saying he considers producers' decisions to block sales of meat as "extortion," because meat "is not affected by the export taxes." -------------- Comment -------------- ¶6. (SBU) This is the first massive strike of the entire agricultural sector against the Cristina Fernandez de Kirchner administration, and it has now surpassed in size all previous strikes by the sector within the last 30 years. Although Government officials indicate that they will not revise their policy decision, which has the effect of raising taxes on most agricultural commodities, there are rumors within the sector that policymakers are entertaining the idea of collecting export taxes based on producers' volume of grain sold. That would be a transparent attempt to peel off smaller producers from the strike. However, it is uncertain how the government would structure such an arrangement. Media commentators note that the protests encompass the whole range of producers, from small to large, undercutting the government's efforts to argue that the policy decision was aimed only at wealthier, large producers. Although the organizing agricultural entities have stated that holiday travel will not be affected, Post contacts involved in the protest indicate that the roadblocks will continue. The sector's strike seems to have found some sympathy among the public; that could evaporate quickly as Argentines find their holiday plans disrupted. WAYNE