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Page last updated at 11:13 GMT, Tuesday, 27 January 2009

Argentina declares drought crisis

A cow's skeletonin Stroeder, Argentina, on 19 January 2009
Some 800,000 head of cattle have been lost over the past year

Argentina has declared an agricultural emergency as it confronts one of the worst droughts in decades.

President Cristina Fernandez said the decree would defer tax payments for thousands of farmers for a year.

Farmers' leaders had been calling for action to tackle the drought, which is estimated to have caused losses of at least $4bn (2.8bn).

Argentina is one of the world's biggest producers of soya, grains and beef but has been hit by falling demand.

Several regions of Argentina, including the provinces of Buenos Aires, Cordoba, La Pampa and Entre Rios, have been hit by the worst drought since at least 1971, according to the country's national weather service.

Since March last year, rainfall has been significantly below normal. Among the effects, some 800,000 head of cattle have been lost, while in Entre Rios some 90% of the wheat crop has been ruined.

Strained ties

The worst affected area is the Pampas region, where winds have been whipping up the dry soil and coating huge swathes of barren land.

ARGENTINA'S DROUGHT
map

Under the emergency measures, producers who have lost at least half of their harvest or herd will be exempt from paying most taxes for a year.

"It is a great effort by all Argentines, because no other economic sector is receiving these type of benefits," said President Fernandez as she announced the emergency decree.

President Fernandez has had a strained relationship with the farming sector, which last year staged months of protests forcing her government to back down on an increase on export taxes.

While her announcement could be seen as a rapprochement with the agricultural sector, she also made it clear that her government was not ceding easily to its demands, correspondents say.

"If hotel owners are struggling because the weather is bad and tourists don't come, or if business is bad for restaurant owners, shopkeepers, or builders, there is no law that says they shouldn't pay taxes all year and can put it off to the following year."

However, farmers' leaders indicated the measures did not go far enough.

"The only thing this announcement achieves is to postpone the payment of taxes, and that is of no use to the farmer who has lost his entire crop," Cristian Roca of the Argentine Agrarian Federation told BBC Mundo.



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