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More World news
Argentine gov't says farm strike 'irresponsible'

REUTERS

9:57 a.m. May 16, 2008

BUENOS AIRES – Government officials Friday criticized a decision by Argentine farmers to extend their strike over a hike in export taxes, signaling that an agreement to end the standoff remains elusive.

Farmers launched their second strike in as many months on May 8 after weeks of talks with the government failed to resolve farmer demands for a change in the tax scheme.

On Thursday, farmers decided to keep up the protest that has seen them halt grains sales and disrupt shipments.

The strike threatens to hit exports from Argentina, the world's No. 2 corn exporter and the third-biggest soy supplier, at a time of growing global concerns about food shortages.

Interior Minister Florencio Randazzo said the government thought an appeal for dialogue by President Cristina Fernandez Wednesday would convince farmers to suspend the strike, originally scheduled to end Thursday. Farmers will now strike until May 21.

“We had hoped for a favorable response, not a decision to keep striking,” Randazzo told Radio 10.

The strike “is an attitude of enormous irresponsibility and disrespect toward a democratically elected president,” he added.

In her comments, Fernandez did not mention the strike, but refrained from criticizing farmers as she has in the past.

Farm leaders, however, say she did not go far enough in addressing their calls for the tax hike to be modified.

“It's clear we're not the ones being intransigent on this,” said Hugo Biolcati, vice president of the Argentine Rural Society, one of four farm groups leading the strike.

Farmers first went on strike in March after the government introduced a sliding scale of export taxes that substantially raised the levies on soy and sunseed products.

The March strike caused food shortages in Argentina's supermarkets and landed President Fernandez with her biggest challenge since taking office in December.

She has refused to scrap the sliding-scale tax system and defends high export taxes on farm goods as a way to redistribute wealth and combat inflation in a country where a quarter of the population lives in poverty.

Increased revenue from export taxes has helped the government maintain healthy budget surpluses and keep the peso currency weak to stimulate exports.

The renewed strike has caused jitters in Argentina's financial markets in recent weeks, putting pressure on bonds and the peso currency.

(Reporting by Cesar Illiano, writing by Kevin Gray, editing by Matthew Lewis)


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