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Cablegate: Argentine Agricultural Sector Declares Six-Day Strike

VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #1363/01 2762115
ZNR UUUUU ZZH
R 022115Z OCT 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2165
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 001363

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 AGRICULTURAL SECTOR DECLARES SIX-DAY STRIKE

REF: Buenos Aires 1288

1. (U) Summary: In the wake of the agricultural sector's Mesa de
Enlace coordinating committee ("Liaison Board") failure to reach
agreement with the GOA on key issues during a meeting with Secretary
of Agriculture Cheppi last week, farm leaders announced a six-day
strike that will begin this Friday, October 3, and end on Wednesday,
October 8. Farmers will boycott sales of grains, oilseeds and
cattle destined for local industry and export, and will protest on
the roads. Although they say they will not block all traffic, they
are expected to disrupt the movement of trucks transporting these
commodities. GOA officials have expressed surprise and anger over
the decision due to the announcement on Monday by Secretary Cheppi
that the GOA would introduce a package of reforms for the sector
shortly. End Summary

--------------------------------------------- -----
ARGENTINA'S AGRICULTURAL SECTOR ON STRIKE... AGAIN
--------------------------------------------- -----

2. (U) On Tuesday, September 30, the leadership of the main
Argentine farm organizations represented in agricultural sector's
Mesa de Enlace coordinating committee ("Liaison Board") anounced a
new six-day strike due to the GOA's lack of action on policy reforms
that favor the agricultural sector. The Liaison Board has met with
Secretary of Agriculture Carlos Cheppi on three occasions since the
defeat of variable export taxes by Congress in July. The third
meeting with Cheppi was held last Wednesday, September 12, after
which agricultural leaders reiterated their growing frustration at
"meager results," and what they characterized as GOA stall tactics
to making reforms. Farm leader Alfredo De Angeli immediately called
for a sector-wide strike and that position was ultimately ratified
by the entire Liaison Board.

3. (U) The strike will commence on Friday, October 3 at 12:00 am,
and will last until 11:59 pm Wednesday, October 8. In addition to
rallies and protests throughout the country during the six days, the
Liaison Board has called for a massive rally on the last day in San
Pedro, Buenos Aires province. Local contacts also report that there
will be a march at the Congress with other social organizations
representing retirees and students, where they will support farm
sector reforms, and argue for repeal of "superpowers" legislation
which gives the Cabinet Chief power to re-allocate budget funding
and utilize budget surpluses with minimal congressional oversight.

4. (U) The strike will consist of boycotting sales of grains and
oilseeds destined for industrial processing and export, as well as
cattle (not including livestock in zones affected by the ongoing
drought). Although the Liaison Board has stated that roads will not
be completely blocked, farmers have indicated that they will be
protesting on roadsides and impeding movement of trucks carrying
those agricultural products. Movement of perishable products,
including fruits, vegetables and dairy products, will not be subject
to the strike.

5. (U) Farmers have been seeking reforms to agricultural policies
to create incentives for expanding production of beef cattle and
dairy, as well as elimination of export restrictions and quotas on
beef, grains and dairy. In addition, they seek lower export taxes
for smaller producers and government recognition/support of the
emergency situation farmers face due to the current drought
situation.

----------------------------
OFFICIALS CRITICIZE DECISION
----------------------------

6. (U) Despite widespread press reports over the previous week
indicating the agricultural leaders' strong desire to renew their
strike, Secretary Cheppi said that he was "surprised" by the Liaison
Board's decision. On Monday, Cheppi announced that he and Cabinet
Chief Sergio Massa had worked throughout the weekend on a package of
reforms that would be announced to the agricultural sector this
week. Following the Liaison Board's decision to go on strike, the
GOA has been silent on those reforms and it appears unlikely that
any announcement will be made.

7. (U) Angered by the decision, the most critical reaction was
taken by head of Argentina's Agricultural Commerce Control Office
(ONCCA), Ricardo Echegaray. He strongly criticized the Liaison
Board and said that "most of the members of the Liaison Board live
from what the farm sector produces, but they don't work for the farm
sector." ONCCA has been at the center of much of the contention in
recent months due to its increased power to control agricultural
markets and exports (Ref).

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

8. (SBU) Although the recently announced strike will not likely
create major disruptions to agricultural markets initially (due to
its relatively short 6-day duration), it will likely have political
ramifications for both the agricultural sector and the GOA. Surveys
reported in the press indicate that approximately 48 percent of
respondents support the Liaison Board's decision, with 52 percent
opposing the decision. The strike is a reminder for most of the
Argentine public that problems of the rural sector were not/not
resolved with Congressional defeat of the variable export tax. It
is clear that farm leaders have run out of patience with the GOA's
response (or lack thereof) to their sector's concerns, and they want
to bring their issues back into the public eye and force change.
This time, the strike leaders appear to be betting that a suspension
of agricultural sales will prompt some concessions in their favor,
but it may prove difficult to keep farmers at the grassroots level
from blocking the roads, which was the tactic that most dramatically
caught the public's attention in the last round. End Comment.


WAYNE

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