Cablegate: Argentina: Farmer Demonstration Against Agriculture Policy

VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0208/01 0501935
ZNR UUUUU ZZH
R 191934Z FEB 10
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 0579
INFO MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS BUENOS AIRES 000208

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON EAGR ELAB EFIN AR
SUBJECT: Argentina: Farmer Demonstration Against Agriculture Policy
Brings Some Changes

Summary and Comment

--------------------------------

1. (SBU) A February 17 demonstration by farmers in Chab????s, Santa
Fe province, protesting the government's agriculture policies has
brought about welcome policy changes. That evening, hoping to
defuse the situation and avoid another all-out strike and sales
boycott by farmers, Minister of Agriculture Juli????n Dom????nguez,
and
the President of ONCCA (Argentina's Agricultural Trade Control
Office), signed off on freeing up 10 million tons of corn, and 1
million tons of wheat, for export, prior to a February 18 meeting
of the agricultural sector's Liaison Board to decide future protest
actions. That move seems to have appeased farm leaders who decided
to put strike measures on hold. In addition, on February 18,
Minister Dominguez, and Buenos Aires Governor Daniel Scioli,
announced new subsidies for the cattle and meat sectors totaling
more than AR$55 million, destined for 73 municipalities in the
province. The recent GOA actions to allow more grain sales and
provide assistance to the cattle sector are steps in the right
direction that will likely alleviate mounting pressures on markets
and the sentiment of disgruntled farmers - at least for now, as
producers are now likely to focus on export restrictions for beef
and other issues. End Summary and Comment.

Farmers Demonstrate Against Export Cuts

--------------------------------------------- ----------

2. (SBU) A February 17 demonstration by farmers in Chab????s, Santa
Fe province, protesting the government's agriculture policies, has
brought about welcome policy changes. The demonstration was led by
the Argentine Agrarian Federation (FAA) with the participation of
more than 600 producers, truck drivers and other locals. Farm
sector producers from other parts of the country participated as
well. Vocal farm leader Eduardo Buzzi, head of the Argentine
Agricultural Federation (FAA), said that he wanted to continue to
negotiate with the GoA, but threatened strikes if no positive
results were achieved. The demonstrators were protesting against
the possibility that the government would cut exports to encourage
lower domestic prices. Buzzi said that if the GoA pursued such a
policy, there could be dire consequences, such as a food sales
boycott. He highlighted the need to increase the number of corn
export permits, to improve wheat prices for producers, and to
establish lines of communication to discuss livestock policies.

GoA Agrees to Increase Exports

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3. (SBU) That evening, hoping to defuse the situation and avoid
another all-out strike and sales boycott by farmers, Minister of
Agriculture Juli????n Dom????nguez, and the President of ONCCA
(Argentina's Agricultural Trade Control Office), signed off on
freeing up 10 million tons of corn, and 1 million tons of wheat,
for export, prior to a February 18 meeting of the agricultural
sector's Liaison Board to decide future protest actions against the
onerous government policies. That move seems to have appeased farm
leaders who decided to put strike measures on hold.

New Cattle and Meat Subsidies

-----------------------------------------

4. (SBU) In addition, on February 18, Minister Dominguez, and
Buenos Aires Governor Daniel Scioli, invited Buzzi and other farm
leaders to a meeting during which they announced new subsidies for
the cattle and meat sectors totaling more than AR$55 million,
destined for 73 municipalities in the province.

Comment

5. (SBU) The recent GOA actions to allow more grain sales and
provide assistance to the cattle sector are steps in the right
direction that will likely alleviate mounting pressures on markets
and the sentiment of disgruntled farmers - at least for the short
term, as producers are now likely to focus on export restrictions
for beef. According to livestock experts, stockbreeding was
severely impaired by the worst drought in 70 years, and combined
with counterproductive government policies, concerns about
Argentina's declining cattle herd are real. The announced
subsidies will likely create incentives for farmers to increase
herd size. The wheat market also faces difficulties, as supply
vastly exceeds demand and open exports are necessary to sell excess
supplies. The announcement of one million additional tons for
export should suffice to complete USDA's projected 4 million tons
of exports for this crop year if current production forecasts hold.
Additionally, the 10 million tons of corn released for export
should cover the 9.5 million ton forecast for the crop year.
Although these announcements are steps in the right direction,
several issues such as export restrictions on beef will continue to
create contention between the agricultural sector and the GOA.
MARTINEZ

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