BUENOS AIRES, Argentina (Reuters) — Argentine farm groups are threatening a strike if the government does not show signs of modifying policies that soybean, wheat and corn growers say are killing their profits.
Argentine president Cristina Fernandez’s allies took a beating in mid-term elections Nov.3, shrinking her majority in Congress, ending chances of a constitutional change to allow her a third term and kicking off the contest to succeed her in 2015.
Adding to the political uncertainty in Latin America’s third largest economy, Fernandez had surgery last month to remove blood that had pooled on the surface of her brain after falling and knocking her head. The mid-term defeat could increase Fernandez’s vulnerability to a potential farm strike.
The grain sector has long objected to Fernandez’s interventionist policies, including export curbs on corn and wheat meant to ensure ample domestic food supplies, and foreign exchange controls that have put U.S. dollars out of reach for most businesses and savers who shun the weakening local peso.
“There is no time to wait. We need to deepen our actions and if conditions are right call a farm strike,” said Eduardo Buzzi, head of the Argentine Agrarian Federation.
Growers also say their profits are being reduced by the 35 percent tax that the government puts on soybean exports while inflation, clocked by private analysts at 25 percent, increases operating costs.
Buzzi’s federation, which represents small-scale growers, played a key role in the massive 2008 farm strike that shook the government of Fernandez, then in her first term. Prompted by a farm tax increase decreed by the fledgling president, the 2008 protest brought Argentine grain production to a halt.
The country is the world’s largest exporter of soybean meal animal feed and soybean oil, used in the biofuel sector. Argentina is also the third biggest global supplier of soybeans and corn.