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Page last updated at 11:31 GMT, Thursday, 27 March 2008

Argentine farm tax crisis worsens

farmer drives his tractor during a protest in Cordoba, Argentina, on 26 March
Farmers say they are determined to continue with their protests

A strike by Argentine farmers over rising taxes on major export goods has entered its third week, with little sign of resolution.

Blockades by farmers have led to shortages in the shops and have also hit exports, with some companies saying they cannot fulfil their contracts.

The government says the tax increases are justified and it will use force if necessary to get food to the markets.

Rival demonstrators rallied in Buenos Aires overnight amid some scuffles.

The latest crisis was sparked by the government's decision to introduce a new sliding scale of export taxes, raising levies in some cases up to 45%.

President Cristina Fernandez has refused to back down, saying the taxes are a means to raise badly-needed revenue, curb inflation and guarantee domestic supplies.

Nearly empty meat refrigerator in Buenos Aires on 26 March
Many shops and markets are reporting shortages

"The government is not against the farm sector. Farmers' profits have never been as high as they are today," her chief of cabinet, Alberto Fernandez, said on Wednesday.

Argentina, a leading exporter of beef, corn, soy oil and soybeans, has benefited from the recent global surge in commodity prices.

But farmers say the taxes are hitting them and their communities hard.

"Our profit margins are getting smaller and smaller. What we pay to the state is not returned to us in the form, for example, of subsidies to buy fertilizers or to promote the social and educational development of our communities," Marcelo Rasseto, a small farmer from Santa Fe province, told the BBC.

In general, it seems to me that this is a protest of the well-to-do in fear of losing some of their profits
Jan Dohnke, emailing the BBC from Buenos Aires

Protesters have been stopping lorries carrying farm produce and either turning them back or dumping their goods on the road.

Trade at grain and cattle markets has also been disrupted, while several suppliers of Argentine soy and soy oil to China have been unable to fulfil export contracts, industry officials told Reuters.

The farmers' action has also led to meat and dairy shortages in the shops.

"The government will take the necessary measures to ensure there are no shortages... We have to guarantee people's food supplies," Economy Minister Martin Lousteau said.

Profits

The farmers' dispute also appears to have merged with more general anger against inflation and rising taxes.

"This country is fed up with taxes. Where does the tax money go," retired flight attendant Karin Sagemuner told the Associated Press in the Argentine capital.

"What they are doing to the farmers is shameful by confiscating their money."

Truck driver argues with farmers blocking a road in Tandil, Argentina on 26 March
There have been angry scenes at some roadblocks

But not everyone agrees.

"Prices for basic commodities like dairy products, meat fruit and vegetables have gone up enormously in the recent months, as it is more profitable to export than to sell them in the country," said Jan Dohnke in Buenos Aires in an e-mail to the BBC News website.

"The rising export taxes are one way of trying to correct this process. In general, it seems to me that this is a protest of the well-to-do in fear of losing some of their profits."

There was a second night of demonstrations in the capital, Buenos Aires, overnight, as hundreds rallied against the government.

Pro-government supporters also took to the streets and local media showed brawls between the rival groups.





SEE ALSO
Q&A: Argentina farm protests
27 Mar 08 |  Business
Argentine farm taxes row deepens
26 Mar 08 |  Americas
Argentina's divisions clear to see
26 Oct 07 |  Americas
Country profile: Argentina
12 Dec 07 |  Country profiles

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