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Argentina's Senate Rejects President's Grain Export Tax
Wall Street Journal
July 17, 2008

By Shane Romig

BUENOS AIRES -- Argentina's Senate dealt President Cristina Fernandez a stunning blow Thursday morning, rejecting a controversial grain export tax pushed by the government.

The Senate split evenly on the vote, but Vice President Julio Cobos surprised the chamber by indicating that he would vote against the tax. A weary Mr. Cobos told the Senate that "a law that doesn't solve the conflict is useless." The Senate had been in session for almost 20 hours to debate the tax.
[Cristina Kirchner]

A four-month conflict with farmers over the tax has led to numerous strikes and disruptive roadblocks.

Despite a clear majority in the Senate, the ruling Peronist party saw many legislators from rural provinces defect rather than risk the wrath of voters in farm districts furious over the higher export taxes on soybeans, the country's top crop.

Mr. Cobos is a member of the opposition Radical party, but was chosen for the President's ticket under a so-called "Victory Front" which saw Ms. Fernandez take the presidential sash from her husband, former president Nestor Kirchner, in December.

On Tuesday night, farmers and government supporters filled plazas at opposite ends of Buenos Aires in competing rallies aimed at pressuring the Senate to vote their way on the tax plan. Farmers maintained a vigil in a park in the north of the capital throughout the night until the early Senate vote Thursday. Farm leaders reacted ecstatically to the vote and expressed their firm support for the Vice President's rejection of the tax. "This is a historic victory for Federalism in the country," Argentine Agrarian Federation president Eduardo Buzzi told supporters.

The tax was imposed by executive order in March. Angry farmers reacted to the higher duties on grain shipments with a series of crippling strikes and roadblocks which caused food shortages in the cities, cut off grain exports, and blocked nationwide transportation.

Ms. Fernandez was pressed to send the tax plan to Congress after widespread pot-banging protests engulfed large parts of the Argentina's cities, as frustrated residents demanded an end to the farm conflict. The lingering battle and resulting disruptions pushed the President's approval ratings down to about 20% from more than 50% in January, according to local pollsters.