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Argentines hold rival marches in farm conflict
Reuters
July 15, 2008

By Helen Popper

BUENOS AIRES (Reuters) - Argentina's government and farm leaders drew thousands of supporters onto the capital's streets on Tuesday for rival rallies a day before senators vote on a soy export tax that sparked a deep political crisis.

Farmers hope their rally will convince senators from rural provinces to reject the tax bill, which they say will put small-scale growers out of business, when the ruling party-controlled Senate starts voting on Wednesday.

"This is about showing the will of the people so the provincial representatives vote and decide according to the interests ... of the people who elected them," said Hugo Biolcati, vice-president of the Argentine Rural Society (SRA).

President Cristina Fernandez has seen her popularity eroded by the four-month dispute, which erupted when her center-left government imposed a new system of export taxes on grains that substantially raised the duty on soy, the country's biggest foreign currency earner.

Fernandez's husband and predecessor as president, Nestor Kirchner, was to lead the pro-government demonstration in the capital on Tuesday afternoon, underlining his increasingly public role in the conflict.

The export tax shake-up raised the duty on soybeans to about 45 percent from the previous 35 percent.

It was narrowly approved by the lower house of Congress earlier this month and local media said senators were still divided, predicting a close vote.

Organizers of the pro-government rally in front of Congress said tens of thousands of people would attend, including trade unions and leftist groups based in poor city suburbs.

Farm leaders were due to address their supporters in the middle-class neighborhood of Palermo, one of the city districts where residents banging pots and pans have protested against the government several times in recent months.

PROTESTS

Fernandez hopes Senate approval of the soy tax will allow it to draw a line under the messy conflict, which has rattled financial markets and raised doubts about the economy after more than five years of robust growth.

However, many Argentines doubt Congressional approval will be enough to end the dispute and farm leaders have vowed to take their fight to the courts and resume protests if the bill is passed into law.

"If the result isn't favorable, we still have the justice system, because it would be an unconstitutional law, and we have the right to protest," Biolcati said.

They could decide to resume commercial strikes, which have disrupted soy and corn shipments and forced soy-processing plants to shut down. Argentina is the world's No. 1 exporter of soyoil and soymeal.

Fernandez defends the tax increase as a way to share the bounty of soaring food prices with poorer Argentines, and encourage production of other crops.

Deputies extended tax rebates for small soy producers, but farmers reject the compensation scheme because they fear it will involve long delays and bureaucratic hurdles.