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Cablegate: Argentine Agricultural Sector On Strike

VZCZCXYZ0073
RR RUEHWEB

DE RUEHBU #0368/01 0801702
ZNR UUUUU ZZH
R 201702Z MAR 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0558
INFO RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000368

SIPDIS

SIPDIS
SENSITIVE

TREASURY FOR LTRAN AND MMALLOY
E FOR THOMAS PIERCE
PASS USTR FOR DUCKWORTH
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER
US SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: EAGR ECON ENRG EPET AR
SUBJECT: ARGENTINE AGRICULTURAL SECTOR ON STRIKE

Reftel: (A) Buenos Aires 00328

-------
Summary
-------

1. (SBU) Argentina's agricultural sector has organized protests --
during which no commodities have been sold -- in opposition to
changes announced by Economy Minister Martin Lousteau to Argentina's
agricultural export tax scheme (Ref A). Roadblocks have disrupted
travel across a large part of the country. Protests are expected to
continue into next week and food shortages are expected to begin
next Tuesday. Argentine public opinion is divided, with almost half
supporting the agricultural sector. Government officials publicly
indicate that they will not revise the tax policy decision. END
SUMMARY.

--------------------------------------------- ---
Strike is continuing through the Holiday Weekend
--------------------------------------------- ---

2. (U) To protest changes to Argentina's agricultural export tax
regime that were announced last week by Economy Minister Lousteau
(Ref A), Argentina's four major agricultural producer entities
(Sociedad Rural, CRA, Coninagro and FAA) have instigated and
supported a widespread lockout by the sector (since March 13) during
which no commodities are being sold and roadblocks have disrupted
travel across a large part of the country. Although the strike was
initially planned for two days, the entire agricultural sector has
extended the protests for more than seven days, and they will likely
continue the action beyond the "Semana Santa" holiday weekend. Post
contacts report that roadblocks and protests are expected to
continue throughout the long weekend, despite assurances from the
agricultural sector that holiday travelers will not be affected.
The four groups have agreed to meet again on Monday, March 24, to
determine if they will continue to support the strike.

-----------------
Roadblocks Abound
-----------------

3. (U) The four agricultural entities have organized protests in
more than 70 points across the main agricultural region of the
country. Roadblocks have occurred in the provinces of Buenos Aires,
Santa Fe, Cordoba, Entre Rios, La Pampa, as well as the northern
provinces of Salta, Formosa and Santiago del Estero. Post contacts
have reported that protestors in Cordoba have, in some situations,
seized trucks and railcars of grain headed to market, and dumped the
contents onto the highway and rails. The Embassy sent a warden
message warning of the roadblocks March 20 to U.S. citizens
throughout Argentina.

-----------------------
Food Shortages Expected
-----------------------

4. (U) Producers have shown solidarity in boycotting sales of
agricultural food products. On Tuesday, March 19, reports indicate
that only 95 cows entered the Liniers slaughter market, Argentina's
largest. On a typical day, that volume would reach 10,000. The
following day, no cattle were sold at all. Gustavo Freixas,
Director of the Argentine Cattle Brokers' Association, predicts that
meat shortages will begin by next Tuesday. In addition, the
president of the Argentine Agrarian Federation (FAA), Eduardo Buzzi,
has been quoted that certain breads could also soon become in short
supply.

---------
Reactions
---------

5. (U) Local media surveys of the urban population show that about
fifty percent of the public supports the agricultural producers,
while the other half agree with the government's decision to add
taxes on the sector. Government officials have publicly stated that
they will not revise the tax system. Cabinet Chief Alberto
Fernandez stated publicly that agricultural producers "extort the
people and make them suffer because they [producers] feel they have
the right to keep enormous profits that all Argentines facilitate
for them." Fernandez was also quoted as saying he considers
producers' decisions to block sales of meat as "extortion," because
meat "is not affected by the export taxes."

-------
Comment
-------

6. (SBU) This is the first massive strike of the entire agricultural
sector against the Cristina Fernandez de Kirchner administration,
and it has now surpassed in size all previous strikes by the sector
within the last 30 years. Although Government officials indicate
that they will not revise their policy decision, which has the
effect of raising taxes on most agricultural commodities, there are
rumors within the sector that policymakers are entertaining the idea
of collecting export taxes based on producers' volume of grain sold.
That would be a transparent attempt to peel off smaller producers
from the strike. However, it is uncertain how the government would
structure such an arrangement. Media commentators note that the
protests encompass the whole range of producers, from small to
large, undercutting the government's efforts to argue that the
policy decision was aimed only at wealthier, large producers.
Although the organizing agricultural entities have stated that
holiday travel will not be affected, Post contacts involved in the
protest indicate that the roadblocks will continue. The sector's
strike seems to have found some sympathy among the public; that
could evaporate quickly as Argentines find their holiday plans
disrupted.

WAYNE

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