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Cablegate: Argentine Farmers Renew Protests and Threaten to Strike

VZCZCXYZ0002
RR RUEHWEB

DE RUEHBU #1172/01 2322308
ZNR UUUUU ZZH
R 192308Z AUG 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1845
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE

UNCLAS BUENOS AIRES 001172

USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: ARGENTINE FARMERS RENEW PROTESTS AND THREATEN TO STRIKE

(A) BUENOS AIRES 1012 (B) BUENOS AIRES 0991 (C) BUENOS AIRES 0980

1. (SBU) Summary: On Monday, August 18, the farm sector staged
roadside demonstrations against unresolved GOA agriculture policies
for the first time since the rejection of variable export taxes
(Resolution 125) by the Argentine Congress one month ago. Farmers
have threatened to go on strike by the end of the month if the GOA
does not make advances to resolve their issues. Farmers are
particularly concerned about beef cattle production and dairy
production issues, as well as lower export taxes for small farmers.
End Summary.

--------------------------------------------- ---------
FARMERS RENEW ROADSIDE PROTESTS AND THREATEN TO STRIKE
--------------------------------------------- ---------

2. (SBU) On Monday, August 18, the farm sector staged roadside
demonstrations against unresolved GOA agriculture policies for the
first time since the rejection of variable export taxes (Resolution
125) by the Argentine Congress one month ago (refs B and C).
Frustration and impatience with the Government of Argentina's (GOA)
slowness to respond to the sector's chronic concerns resulted in
"tractorazos" (protests led by farmers riding tractors) and farmer
assemblies in numerous locations around the country, with farmers
threatening to go on strike by the end of the month if the GOA does
not make advances to resolve their issues.

3. (SBU) President of the Argentine Agrarian Federation (FAA)
Eduardo Buzzi, who led one of the protests, indicated that producers
are now worse off than they were on March 11, when the GOA created
variable export taxes and that the agricultural crisis is "far from
resolved." Farmers are particularly concerned about beef cattle
production and dairy production issues, as well as lower export
taxes for small farmers. Producers argue that cattle and dairy
production have steadily declined in recent years due to government
price and export controls -- issues which were not resolved by the
Congressional decision against variable export taxes. Also,
increased input costs and lower world prices for commodities have
eroded profitability for small farmers -- which, they argue, are
unprofitable when required to pay a 35% export tax on soybeans.

4. (SBU) Despite two meetings with Agriculture Secretary Carlos
Cheppi, the agriculture sector is not convinced that the GOA is
working sincerely to resolve farmers' concerns. The agriculture
sector argues that Cheppi's proposals have been largely "hollow" and
that meetings have confirmed that the Government is asking for more
time/stalling to establish favorable policies. At the same time,
there have been signals of confrontation, which were manifest by the
Government's non-participation at the recent Palermo Livestock Show
(Argentina's largest farm show, where government officials usually
participate); and the government's recent closure of cheese exports
(which allegedly resulted due to a personal argument between a
cheese exporter and Secretary of Commerce Guillermo Moreno).

5. (SBU) A prominent political analyst told CDA August 19 that he
does not think that the first couple intends to avoid another
confrontation with the farmers. As evidence, he cited the recent
protest organized by the Madres de Plaza de Mayo, a
government-allied activist group that coordinates closely with
former president Nestor Kirchner. On August 18, the Madres hung
1,500 of their trademark hankerchiefs emblazoned with the slogan
"Not One Step Backward" around the Casa Rosada presidential palace.
Madres leader Hebe de Bonafini said that the protest was designed to
warn the agricultural organizations that "they have no right to
block the roads when they already won in Parliament."

6. (SBU) Noting that such a protest would take at least 48 hours to
organize, the analyst interpreted this demonstration as evidence
that Kirchner-aligned groups are already mobilizing for another
confrontation. He speculated that the first couple is welcoming
another confrontation with the farmers in the mistaken belief that
their ability to defeat the ag sector will enable them to regain
political momentum. He claimed that they are embarking on this
course because of the Argentine public's opposition to further road
blockages and other protests by the farmers in the wake of their
victory in the Parliament on the export tax dispute; growing
divisions within the farm organizations; and more sympathetic
coverage from the Clarin media conglomerate because of a purported
truce agreed by Nestor Kirchner and the conglomerate's boss. The
analyst predicted that this confrontational strategy would
ultimately fail.

------------
WHAT'S NEXT?
------------
7. (SBU) For next Saturday, cattle farmers are planning a large
producer assembly in Olavarria, Buenos Aires province, to analyze
GOA export and price controls on beef cattle production and
establish a strategic plan for changing the sector's course. In
addition, farmers are planning a major National Assembly on August
30 in Entre Rios, as well as a large protest on September 8
(Argentina's "Farmer's Day"), in front of the Argentine Congress.
The most critical remarks made at yesterday's protest were by FAA
Vice-Director in Entre Rios, Juan Echeverria, who said that for the
National Assembly on August 30, producers will gather at the tunnel
connecting Parana and Santa Fe (two large cities on opposite sides
of the Parana River); and from that day on, they will intensify the
fight by "blocking roads, by striking, or whatever it takes."


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

8. (SBU) The farmers' actions show a growing frustration and
impatience with the Kirchner administration's handling of the
sector's other unresolved issues in the wake of Resolution 125's
defeat. Clearly, the variable export taxes were only one part of
the sector's concerns, and the August 18 demonstrations were
intended to be a wake-up call to the Kirchner administration and the
public at large that the GOA's conflict with the agricultural sector
is far from being resolved. It would appear that these protests
mark the beginning of a new chapter in the saga of Argentina's
agricultural conflict. Producer assemblies and GOA
actions/reactions in the weeks to come will determine the severity
of farmers' protest strategy. End Comment.

KELLY

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