Argentine Farmers Resume Protests with Six-Day Strike

Argentine Farmers Resume Protests with Six-Day Strike

BUENOS AIRES, Argentina -- Argentina's four principle agricultural organizations declared a six day strike on Friday, Oct. 3. Facing the worst drought in a century and fearful of the potential for contagion from the American financial crisis, agricultural producers are demanding relief from the government, principally in the form of a reduction in export taxes.

The longstanding dispute between the countryside and Buenos Aires has its roots in structural changes in the Argentinean export economy that have emerged over the past decade, with Argentinean farmers devoting increasing amounts of land to soy crops destined for the Chinese and European markets, reducing food supply to the domestic market. The worldwide food shortage has exacerbated the problem, with soaring prices for grains and beef in the northern hemisphere, prompting agricultural producers to divert more of their goods to those lucrative export markets.

In response, previous president Néstor Kirchner's administration began taxing agricultural exports in order to subsidize price controls for domestic foodstuffs, as well as other public services. Many economic analysts criticize export taxes as a disincentive to production and a long-term restraint on growth. But as the Economist reports, these taxes currently provide 10 percent of the Argentine government's revenue.

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