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Cablegate: Argentina: Ambassador Discusses Farm Strike With

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OO RUEHWEB

DE RUEHBU #0435/01 0991459
ZNR UUUUU ZZH
O 081459Z APR 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0657
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1777

UNCLAS BUENOS AIRES 000435

SIPDIS

SIPDIS
SENSITIVE

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

E.O. 12958: N/A
TAGS: EAGR ECON ETRD PGOV AR
SUBJECT: ARGENTINA: Ambassador Discusses Farm Strike with
Agricultural Producer

REF: BUENOS AIRES 0415, 0421, 0408

1. (SBU) Summary: Ambassador met with one of the largest soybean
producers in Argentina the day after the agricultural strike was
suspended for 30 days. Government supporters have responded to the
agricultural strike by attacking large producers and soybean
production in general. The agricultural sector is, however, much
more united and organized than prior to the strike, this producer
says, and, the strike could easily be resumed at the end of the
current 30-day suspension. The producer also has a high profile
operation to produce soybeans in Venezuela. It is not fairing well.
End Summary

2. (SBU) Ambassador met April 3 with Gustavo Grobocopatel, the
General Manager of Los Grobo, one of the largest soybean producers
in Argentina, to discuss the state of play in Argentina's
agricultural sector following the suspension of the farm strike the
previous day. Los Grobo is a diversified company that manages over
110,000 hectares of land in Argentina and 40,000 hectares in Uruguay
and Paraguay (as well as operations in Venezuela and Brazil). Los
Grobo has had excellent relations with the GoA, which has cited thecompany in the past as an example to follow in the area of
management and technological innovation. Mr. Grobocopatel was
selected as businessman of the year for 2007 by a local business
magazine.

3. (SBU) Mr. Grobocopatel was concerned by attacks directed at him
by GoA supporters during the strike that accused large
"oligopolistic" producers like him of being unwilling to share
"inordinate" profits they derive from exporting soybeans at current
historically high international agricultural commodity prices. He
said he had tried to keep a low profile during the strike, which he
believed truly represented a groundswell of opposition from all
parts of the rural sector to this latest increase in GoA export
taxes, but he had felt compelled to speak out in defense of a sector
he believes essential to Argentina's future.

4. (SBU) Grobocopatel noted that the strike has placed local
government officials in a difficult position: while often supporters
of the national government, they were under heavy pressure by their
constituents to support the strike. These officials were pressing
the provincial governors to seek a solution to the strike. The
rural sector is now much more organized and active than any time in
the past, facilitated in part by the widespread use of mobile
telecommunications. New farm leaders have emerged as a result of
the strike, and they appear to be much more articulate and less
ideological than traditional farm leaders.

5. (SBU) Grobocopatel was surprised by the strong attacks against
the dramatically expanded production of soybeans in Argentina, as
the government justified the increase in the export tax as a means
to avoid the development of a soy monoculture. The GoA accused
highly efficient and technologically dependent large-scale soybean
production of destroying employment and causing the problems faced
by small producers. He blamed part of this criticism on a lack of
knowledge of the sector by GoA officials. He called expanded
soybean production a major contributor to Argentina's post-crisis
economic recovery and argued that taxes on soybean exports had made
it possible for the GoA to pay off its IMF debt.

6. (SBU) Los Grobo has been expanding in other countries in the
region with very successful investments in Brazil and a high profile
GoA-supported venture with the Venezuelan Government to produce
soybeans in Venezuela. When asked about this venture, Grobocopatel
said the operation was not going well. His business model is based
on working with a network of suppliers and contractors to provide
inputs and operate farm machinery under contract, but this basic
network does not exist in Venezuela. Even with government support,
he has found it almost impossible to operate in Venezuela.

7. (SBU) When asked about the future of the farm strike, Mr.
Grobocopatel called the current suspension of the farm strike
temporary and argued it could easily be resumed at the end of the
30-day suspension. He said farmers were anxious at this time to
return to their farms and harvest their crops (the strike has
delayed the harvest of corn and soybeans by two weeks). But he said
farm organizations had established a coordinating committee which
appears to have staying power to help farmers negotiate in a more

united way with the GoA and to resist GoA efforts to divide and
conquer.

8. (SBU) COMMENT: The dispute between the GoA and the rural sector
is currently on hold, pending negotiation which will reportedly
start this week, but the strike could easily start again at the end
of the 30-day suspension. It appears that large, highly efficient
producers will continue to be subject to attacks by government
supporters. At present, the pro-GoA truckers union is blockading a
Grobocopatel plant, supposedly because workers are not being paid
full benefits. While the GoA is seeking outside investment, these
high-profile attacks on successful local businesses can only make
this task more difficult. END COMMENT

WAYNE

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