Argentine farmers have been on strike for the past two months to protest a 44 percent export tax on soybeans and other products, a tariff that has crippled grain exports from the world's third largest soybean producer. This strike has encouraged speculators on the Chicago Board of Trade futures markets to ramp up all grain prices since January as chaos ensued in Argentina.
 
Argentina produces enough food for 500 million people and is the world's third largest grain exporter after the US and Brazil. Protesting farmers blocked routes which prevented meat, milk and other basic products from being distributed which fueled inflation in the cities. The government of President Cristina Fernéndez de Kirchner is negotiating to try and resolve the conflict and in a potential breakthrough, members of four farming groups who had organized the strike have agreed to meet with the government and discuss a possible solution.
 
Arable farming in Argentina has traditionally been dominated by wealthy families such as the Bunge Group which dominate the pampas and as such all these companies prospered even during the military dictatorships which characterize Argentine history. Thus, Fernéndez is facing up to the main economic power in Argentina as I write.
 
After the 2001-2002 financial crisis triggered by neo liberal exploitation policies implemented by the Menem regime in the 1990`s, Argentine voters plumped for left of center democracy in the figure of N�stor Kirchner. After one term his wife, Cristina Fernéndez de Kirchner took over the reins of power with a landslide victory in the October 2007 presidential elections. Fernéndez is progressive in outlook and outspoken which in no way suits the traditional landed oligarchy or their economic interests.
 
The strike mounted against the soybean export tax appears to be a pretext to destabilize the government of Fernéndez. In November 2005, the previous Kirchner government slapped a ban on meat exports from Argentina in order to guarantee the supplies to local consumers, thus preventing cattle ranchers and slaughterhouses from raking in huge profits in US dollars. This measure did not spark a strike, so why this time in the context of the soybeans, after it was Kirchner himself who opened up the Chinese market for soybean exports in July 2005?
 
The Argentine right wing has come to the conclusion that its electoral chances of getting back into power are very, very limited. The answer, therefore, is the destabilization of the government with a view to overthrowing it and the best way is to hit the voter's wallet and stomach with higher food prices and actual shortages in the cities, especially Buenos Aires. This will cause social unrest and to hell with it if the economy is badly wounded, we want "Cristina" out now!!
 
The Argentine oligarchy has all the major TV, radio and written press supporting its case against the government and this point of view is being digested by the widespread middle classes who tend to support economic power and buy right wing national newspapers such as La Naci�n as their source of news coverage.
 
So far the Fernéndez government has stood firm and wealthy farmers have taken a bad financial hit during the drawn out strike, which must be hurting their pockets by now. Hence, negotiations with four farmers' groups appear to be underway.
 
This scenario is similar to the oil industry sabotage and lock out which occurred in Venezuela from early December 2002 until February 2003. The Ch�vez government emerged strengthened from the conflict with a badly shaken economy.
 
The question for Argentina is if Fernéndez has the fiber to continue standing firm without making too many concessions to the oligarch capitalists who wield economic power in this austral nation. This group is bent on free trade without taxation instead of fair trade so that the excluded can benefit indirectly from the land which houses Argentina's huge agricultural sector.

Copyright 2008 by AxisofLogic.com

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