Page last updated at 13:25 GMT, Wednesday, 18 June 2008 14:25 UK

Argentina's farm row turns to crisis

By Daniel Schweimler
BBC News, Buenos Aires

Protesting farmers block roads near Rosario
The farmers' protests have caused deep divisions in Argentine society
When the Argentine government put up tax on farm exports, it created a problem - a conflict with the country's farmers, who felt they were being asked to pay too much. Now, nearly 100 days on, that problem has turned into a full-blown crisis.

Farmers have put up roadblocks around the country. In turn, truck drivers angered at the farmers' protest have begun conducting similar demonstrations.

Exports are not reaching the ports, food is not reaching the markets, and long-distance bus companies are cancelling journeys.

And those are the short-term problems. Economist Martin Krause warns that a continued dispute will have serious long-term effects.

"Agricultural producers, who have already invested a great deal, will think twice before investing any more," he says.

"It also sends the wrong signal to potential investors from abroad, who'll think, 'Why should I go where we see such a mess?'"

Potential profit

Argentina is one of the world's biggest producers of soya, grains and beef. Its exports fetch high prices on international markets, and their earnings played a large part in helping Argentina's revival after its economic collapse at the end of 2001.

The economy has been growing steadily since then. Cristina Fernandez de Kirchner easily won last October's presidential election on a promise to continue the work of her predecessor and husband, Nestor Kirchner.

A sign that reads in Spanish 'there is no super, premium or diesel'
The roadblocks have left many petrol stations dry
It should have been simple. The world needs food and is willing to pay high prices to get it; Argentina is able to produce what the world wants.

But it is those potentially profitable circumstances that, in some ways, are creating the problem.

Arturo Llavallol, the vice-president of the Rural Society - the largest farmers' organisation - dismisses claims that some farmers are trying to destabilise the government.

"We want this government to finish its mandate," he says.

"But they need to talk to us. We want to sit down and discuss in the short term, the medium term and the long term how we can again make Argentina one of the world's biggest producers in a world that needs food."

He adds, however, that President Fernandez probably does not understand agriculture.

"She needs advisors," he says. "But I feel she doesn't have great advisers."

Different dispute

The government says it raised the tax on farm exports to help finance its battle against inflation and fight poverty.

Rally in support of Cristina Fernandez
President Fernandez called a rally on Monday to support her government
Despite the growing economy, more than a quarter of Argentines still live below the poverty line. And it is from the poor that the governing Peronist party draws much of its support.

The farmers simply say that the increases are crippling, and that very little of what they pay is reinvested in rural areas.

The clash started as a simple battle between city and countryside - long-standing rivals which have always had difficulty understanding one another's problems.

But when middle-class residents of Argentina's cities came out onto the streets bashing pots and pans in what has become a popular form of anti-government demonstration, the dispute started to look very different. What on earth could those wealthy women in fur coats from the leafy Buenos Aires neighbourhoods have in common with farmers out on the Pampas bringing in the soya harvest?

The answer is a simple dislike of Cristina Fernandez and her government, which many say is still controlled from behind the scenes by her husband.

Others accuse it of intransigence, or of sending what they call "paid thugs" out to break up pro-farming protests.

More and more people are taking to the streets, not necessarily because they support the farmers but because they oppose President Fernandez, who has been in power for just seven months. Splits are even showing amongst her own supporters in the governing Peronist Party.

'Here we go again'

On Tuesday, the president took over the radio and television airwaves to address the nation and try to halt what was fast looking like a problem out of control.

Nestor Fernandez
Some claim President Fernandez's husband Nestor is really in charge
Both sides needed to show they have numbers on their side - and both sides claim they're doing what is best for Argentina.

But while the newspapers and television programmes are full with every twist and turn of the dispute, most Argentines are tired and angry.

Roadblocks mean they cannot visit friends and family in other parts of the country; business is suffering; and there is impatience with a governing elite which appears to be dragging Argentina towards yet another disaster.

As economist Martin Krause puts it, "People here almost think it's natural to have a crisis every eight or nine years.

"Some just think, 'Oh well! Here we go again.'"

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