We’ve seen producer protests in Canada, but nothing like the farmers’ strike in Argentina in the last few weeks.
Farmers there have blocked highways and ports, stopping grain, oilseed and beef deliveries, halted exports and emptied grocery store shelves throughout the country. Their strike was also delaying the soybean harvest.
The disruptions have supported international grain prices because Argentina is the world’s third largest soybean exporter and second largest corn exporter.
The triggers for the protest were increased export duties imposed by recently elected president Cristina Fernandez de Kirchner.
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Trade issues existed long before U.S. president Donald Trump and his on-again, off-again tariffs came along, said panelists at a policy summit last month.
A sliding-scale tax replaced a fixed tax of 35 percent and levies on soybean exports were boosted to 44 percent at current prices. Taxes also rose on soy oil and meal exports.
The government was expected late on March 31, after the Western Producer’s deadline, to introduce measures aimed at defusing the crisis by easing the tax burden on small-scale farmers in the country. Farmers appeared skeptical that it would solve the standoff.
The left leaning Fernandez implemented taxes and export limits to control food inflation and limit what she sees as windfall profits in order to redistribute wealth in Argentina where nearly a quarter of the population is poor.
We might complain about farm policy in Canada, but we haven’t had to endure the government directly taking from farmers a portion of their earnings from export sales.
We also don’t see the kind of sharp social divide that is evolving in Argentina.
Citizens there are taking sides and staging their own street protests, some in favour of the farmers, others against.
Such divisions could spread to other countries.
The food cost rises we have seen in North America are not onerous for most, but in countries where the poor spend most of their income on food, it is a different situation.
Politicians will do well not to take the easy path of blaming farmers and cutting their incomes. It will simply remove the incentive to increase production to meet the world’s growing demand for food and make the situation even
worse.
