Argentina’s Farmers Rise Up against Kirchner’s Protectionism
The protests targeted called for an end to high export tariffs, quotas, and price controls implemented during the Cristina Kirchner administration, said leaders from the Argentina Rural Society (SRA), Argentinean Rural Federations, and Coninagro. Argentina’s Agrarian Federation did not support the strike.
Representatives from the three participating unions said the strike was a reaction to “an exorbitant tax burden, limitations to credit, price controls, obstacles to the import of supplies, among other measures” that “have generated a loss of competitiveness that translates into widespread unrest.”
Luis Miguel Etchevehere, the president of SRA, said during a press conference on Wednesday that the strike was “emphatic” and called on the government to “urgently change course.” He also claimed the agricultural sector is “suffering.”
— Agrofy (@AgrofyARG) March 12, 2015
“Agricultural strike: [producers] demand ‘urgent change of course.'”
The strike coincided with the anniversary of the agricultural protests in 2008 when the Argentinean Congress repealed Resolution 125, an initiative that set export tariffs at a flexible rate according to each product’s price on the international market.
The strike resulted in very few, if any, animals being trucked into the capital for market. On the last day of the protests, the National Milk Producers Association, which normally does not participate in strikes given their product’s perishability, joined in and stopped distribution for 24 hours.
The president of Argentina’s Agrarian Federation (AAF), Omar Príncipe, explained that his members declined to participate in the strike because “small and medium producers cannot afford not to trade.”
Príncipe said the crisis affecting the agricultural sector today “is much worse than during 2008’s conflict, because international prices are much lower.”
AAF Vice President Ariel Toselli agreed, and said going on strike now would be “a mockery.”
On Friday, Cabinet Chief Aníbal Fernández responded on behalf of the administration by saying the strike was “irrelevant” and politically motivated.
“In most cases, it has had no effect, and they [the farmers] have worked normally. These kinds of expressions are meaningless,” he said.
Lower Output, Less Consumption
Marcelo Rojas Panelo, a veterinarian and SRA leader, told the PanAm Post that the government has not sat down with union leadership to discuss solutions to the problems he believes the government itself created.
Rojas points out that the national government prohibited meat and wheat exports in 2006. Producers today require a special permit in order to export these products.
Before 2006, Argentina was the world’s third-largest exporter of meat and the top consumer, he says. “We used to export 800,000 tons. Today, we don’t reach 200,000. Domestic consumption has also dropped.”
A resident of the rural city of Azul, Rojas says that Uruguay now exports and consumes more meat than Argentina.
Since many producers cannot export wheat, they’re forced to sell it to local buyers who “set the price they want,” he says. Rojas further claimed Argentina in 2014 had “the worst wheat crop output” in the last 100 years.
As for meat, “it stopped being profitable,” he says, adding that some 100 meatpacking businesses have been forced to shut down. “Many producers have decided to switch over from livestock to soy plantations.”
“They’re doing everything backwards. The government raised US$75 million just from agricultural tariffs,” Rojas said.
High Tariffs Equal Less Revenue?
For Argentinean economist Iván Cachanosky, high tariffs can have a negative impact on a country’s economy. “[In this scenario], even the government loses, because any source of revenue will depend primarily on two variables: price and quantity.” Cachanosky explains that high tariffs translate to lower quantities produced, which then leads to lower revenues.
“Clearly it is preferable to have a more friendly dialogue with fewer tariffs, so that output increases and even the government can raise more money. It would also improve the quality of our institutions, which are very weak,” he concluded.
Translated by Daniel Duarte. Edited by Guillermo Jimenez.