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Cablegate: Argentine Farmers Resume Strike - Grains and Beef Targeted

VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #0733/01 1492245
ZNR UUUUU ZZH
R 282245Z MAY 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1188
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 000733

USDA FOR FAS/OA/OSTA/OCRA/ONA/OGA/OTP/OCBD/OAO/OFSO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: ARGENTINE FARMERS RESUME STRIKE - GRAINS AND BEEF TARGETED


REF: Buenos Aires 0711 and previous

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

1. (SBU) Argentine farm groups are back on strike, at least until
June 2, and will block marketing of grains and oilseeds for exports,
as well as sales of cattle for slaughter. The farm groups have
called for protestors on the highways to allow free movement of all
other transport, although there may be efforts to expand the
blockade in some locations. The resumption of the strike came after
the GOA cancelled meetings with farm groups in the wake of tough
criticism directed at the President and the GOA during the huge farm
protest in Rosario on May 25. The estimated 200,000 protestors in
Rosario far exceeded attendance at the official Revolution Day event
led by President Cristina Fernandez de Kirchner (CFK) in Salta.
Supporters of the GOA in the Peronist Justicialista Party (PJ), led
by the newly appointed party president Nestor Kirchner, launched a
hard-line attack on the rural sector, accusing it of being
antidemocratic and trying to overthrow the government. Farm group
leaders tell us they expect the impasse to continue for a long time.
End Summary.

-----------------
On Strike - Again
-----------------

2. (SBU) The Argentine farm strike resumed at midnight on May 27
following the government's refusal to meet with farm leaders to
discuss the controversial variable rate export tax, which since its
introduction on March 11 has been the main issue in the on-again,
off-again farm strike. The farm groups are asking producers to stop
marketing grains and oilseeds for export from midnight May 27
through midnight June 2. They will stop marketing cattle for
slaughter a day later, starting at midnight May 28, through midnight
June 2.

3. In an effort to address concerns about possible food supply
shortages in the major cities, the farm groups have called for
protesters on the highways to refrain from blocking movement of all
other transport (beyond grains/oilseeds and livestock). They have
also emphasized that there will be no shortage of beef in stores due
to large stocks that have accumulated as a result of government

restrictions on exports. The extent to which local protest groups
on the highways are willing to limit their protests is, however,
open to question. Protestors in Entre Rios province who control the
main road to Brazil and Uruguay are threatening to block
international transport starting Wednesday evening.

4. (SBU) The initial economic blockade will be followed by more
political protests from June 3 to 6. The farm groups will establish
camps in the main rural cities, visit local mayors, and collect
signatures for a petition against the variable export tax. In an
effort to increase pressure on provincial governors supporting the
GOA, they will hold marches in the provincial capitals of those
governors that have not agreed to meet with the farm groups.
Starting Monday, June 9, the farm groups will reportedly begin
lobbying the national legislature to seek a legislative solution to
the dispute. The Administration currently has a solid majority in
the legislature, but the farm groups will challenge the ruling
bloc's cohesion by focusing pressure on representatives from rural
areas.

--------------------------
The Battle Lines are Drawn
--------------------------

5. (SBU) The GOA cancelled meetings with the farm sector planned for
May 26 in the wake of farmers' extensive criticism of the
Administration at the mass demonstration in Rosario on May 25. Most
local analysts estimate the turnout for the protest in Rosario at
around 200,000, making it one of the largest demonstrations in
Argentina in the last 25 years and easily outdrawing attendance at
the GOA's official Revolution Day ceremony in Salta (estimates for
the official event range between 20,000 and 70,000). While CFK
avoided reference to the farm sector in her official speech, the
farm leaders were not so reticent, accusing the GOA of failing to
negotiate in good faith. Officials in the GOA appear to have been
particularly offended by claims during the protest that the
President was not telling the truth in the agricultural dispute and
that the main barrier to growth in Argentina is now the President
and her husband (former President Nestor Kirchner). The GOA
announced early on May 26 that it would not meet with the farm
leaders as previously planned, complaining that it was impossible to
negotiate in the face of pressure and demands from the farm sector.
6. (SBU) Positions are hardening on both sides. The governing party
Peronists (PJ), led by Nestor Kirchner (NK) who is former president
and husband of the current president, issued a statement in support
of the President shortly before the announcement by the farm groups
on May 27. In a hard-line attack on the sector, the Peronists
accused the rural sector of being antidemocratic ""coupmongers""
trying to overthrow the government. The PJ communique claimed
farmers had been the authors of the 1930, 1955 and 1976 coups and
were trying to do the same with this strike. At a separate
function, a labor rally, powerful Planning Minister Julio De Vido
spoke for the first time about the strike, claiming that it was ""no
longer time for the faint-hearted,"" and calling on those who favored
the Kirchners' attempt at income redistribution to show their
support.

Farm Leaders on the Way Forward
-------------------------------

7. (SBU) Several ag sector leaders told the DCM at a May 28 lunch
that they expected a protracted struggle. Luciano Miguens,
President of the Sociedad Rural Argentina (SRA, described in detail
in Buenos Aires 408), said that ex-President Nestor Kirchner is
calling the shots within the GOA and will not allow it to make any
concessions. The GOA strategy, he said, was to draw the conflict
out as long as possible and engage in an intense effort to turn
public opinion against the farmers. This approach and tactical
""concessions"" designed to appeal to smaller farmers were designed to
split the rural sector.

8. (SBU) Miguens and his deputy Hugo Luis Biolcati expressed
confidence that the farmers' unity would hold. This, they remarked,
was a new phenomenon -- the Argentine farmer, he said, was typically
independent and averse to working collectively, even towards common
goals. (He noted that SRA's staff often fields calls from farmers
with elaborate ideas on political strategies who, when asked for
their membership number, confess that they don't belong to the SRA
or any other group.) Miguens, who as leader of the oldest and most
affluent rural organization is often identified as a ""dove"" in this
struggle, said that if anything, he and other leaders were being
pushed by their members to take a harder-line stance.

9. (SBU) Another lunch participant, Rural Workers and
Longshoreman's Union chief Geronimo Venegas, said that cracks were
emerging in the GOA's alliance as well. Venegas, a member of the
board of the Confederacion General de Trabajadores (CGT), the
umbrella labor group run by Kirchner ally Hugo Moyano, heads a union
claiming more than 300,000 members. Venegas said that Moyano, who
is considered a staunch supporter of and enforcer for the Kirchners,
is in fact treading carefully, as many in the CGT (including in his
own trucking union) depend on the ag sector for their livelihood.
Venegas opined that Moyano hopes to get a favorable wage increase
for his union members by collaborating with the government, but will
not stay with it until the bitter end. He added that Moyano does
not like the leaders of the ""piquetero"" street protestors who are
also being mobilized by the GOA to intimidate the farmers.

COMMENT
--------

10. (SBU) Both sides have now backed themselves into hard-line
positions that make a swift resolution seem unlikely. Ominously,
they also both seem resigned to an extended conflict, and both hope
that internal contradictions will cause the other side to fold. END
COMMENT

WAYNE

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