By IPS Correspondents
BUENOS AIRES, Jan 31 2007 (IPS)

A state of permanent confrontation: that is how analysts define the nearly four-year-old relationship between the centre-left Argentine government of Néstor Kirchner and leaders representing agriculture at all levels, from large landowners to farming cooperatives.

Historically, the influential agriculture and livestock sector has seldom seen eye to eye with the Justicialista (Peronist) Party (PJ). President Kirchner is a member of this eclectic political movement, which was founded in the mid 20th century by Juan Domingo Perón, three-time president of Argentina (1946-1952, 1952-1955, 1973-1974).

But the farming industry has grown steadily since Kirchner took office in May 2003, in terms of volume as well as prices on the international market. Soya, maize, wheat, dairy products, beef and fruit are all enjoying a boom.

Yet the differences between government and producers prompted farmers to block roads in several parts of the country on Jan. 23, the same day the International Court of Justice legitimised roadblocks set up by opponents of a paper pulp mill being built on the Uruguayan side of a border river, an action which at first was encouraged by the government.

These demonstrations were organised by the Argentine Rural Confederations (CRA) which represents medium-sized farmers, and the Argentine Agrarian Federation (FAA) made up of small producers. The traffic blockades targeted highways in central and eastern parts of the pampas, the world’s largest fertile prairie lands.

The farmers were protesting what they call the government’s “short term vision” and “interventionism,” and in particular the four percentage point hike in the export tax on soya imposed in mid-January, which takes the tax (or “retention”) up to 27.5 percent.

In July, a 48-hour farmer’s strike was held to protest restrictions on beef exports, and in December a week-long strike was held, taking the form of not selling farm produce to distributors. Some rural associations are now threatening to hold a 10-day strike.

Other important farmers’ organisations are the powerful Argentine Rural Society (SRA), an association of large landowners and producers committed to free market economic policies, and CONINAGRO, an umbrella group for dairy cooperatives. Both of these are critical of the government, but open to dialogue with it, and neither of them participated in the Jan. 23 roadblock protest.

Blockades of traffic on highways and streets, known as “piquetes” (pickets) in Argentina, are a measure originally taken by thousands of workers made redundant in the mid-1990s in Cutral Có, in the southern region of Patagonia, and in Tartagal, in the northern province of Salta, due to wholesale privatisations.

The roadblocks later became intense mass protests, especially in the city and province of Buenos Aires, as the unprecedented economic crisis in late 2001 bit deeper. A strong, diverse movement of people marginalised by the economy and society emerged, calling themselves “piqueteros” (picketers).

In spite of insistent calls by the middle classes, the business community and even a sector of the press, Kirchner consistently refused to order police action to remove the piqueteros by force.

The Kirchner administration’s conflict with farmers is odd in a number of ways. Its roots lie in the January 2002 devaluation, a departure from 10 years of Argentine peso parity with the dollar.

The devaluation, an inevitable consequence of the late 2001 economic collapse which swept away the administration of Fernando de la Rúa (1999-2001) only half-way through his term, significantly boosted earnings on commodity exports.

While farming costs were partially in pesos, external demand reached unprecedented levels thanks to the needs of countries like China, and international prices in dollars rose accordingly.

This also raised domestic food prices, just when the economic crisis increased the proportion of people below the poverty line to 57 percent of the population of 37 million in the first half of 2002. Since then, the poverty rate has fallen to 32 percent.

In order to moderate the rising trend in prices, the interim government of Eduardo Duhalde (2002-2003) reinstated taxes (retentions) on exports which varied according to the primary goods exported. When Kirchner took office, he expanded state intervention measures, by altering the retentions on exports, reaching price agreements or applying direct pressure on the food industry and producers to control prices.

This led farming associations to complain that industrial exports were being given an unfair advantage, and that farmers’ earnings were the target of the only adjustment variable used to contain domestic prices.

Some government measures were rather abrupt, like the total ban on exporting beef decreed in March 2006, which was partially lifted two months later. It particularly hurt small producers, who were less financially able to withstand it.

However, the conflict is not all about economic considerations. Pedro Apaolaza, president of the powerful Federation of Rural Associations of Buenos Aires and La Pampa (CARBAP, a branch of the CRA), explained some other aspects of the dispute to IPS.

“The government’s attitude is partly ideological, a legacy from everything that happened in the previous conflict,” in the 1970s, when serious conflict broke out between left and right, especially within the Justicialista Party itself, Apaolaza said.

Kirchner, in his youth aligned with the left wing of the Justicialista Party, has partly satisfied the ideas nurtured by a sector of Argentine society for over 30 years by, for example, prompting the reopening of trials for human rights violations committed during the 1976-1983 military dictatorship.

With the exception of the FAA, which formerly supported agrarian reform and was linked to social organisations and unions, the leaders of the farming world openly supported the dictatorship, and afterwards backed the government of Carlos Menem (1989-1999), also a member of the Justicialista Party but ideologically at the opposite extreme from Kirchner.

SRA Vice-President Hugo Biolcati told IPS that “the conflict has a certain amount of ideological content.” He agreed with Apaolaza that “the authorities do not really know what the markets for farm produce are like.”

There are an estimated 240,000 rural producers in Argentina. Biolcati said that “in Argentina’s rural areas today, there are mainly small and middle-sized farms, which are high-risk businesses and are not at all like the élite image that is portrayed,” and as used to be the case in the past.

Furthermore, he complained that in this country “politicians win votes by coming down hard on farming. Perhaps it’s our fault for not knowing how to fight those prejudices, so it’s easy for them to score points, accusing producers of being greedy oligarchs who don’t do any work themselves,” he said.

“I think there may be a bit of this on both sides,” said Biolcati, referring to prejudice against Kirchner. “That’s why we’re trying to tone down the confrontation, and generate more dialogue and mutual understanding. The situation today is not the same as it was in 2006, and if strong measures (the strikes) are repeated too often they lose effectiveness,” he concluded.

An analysis of the agricultural sector in Argentina today requires looking at what is occurring with soya, which is displacing traditional crops. Last year Argentina exported 8.9 billion dollars of soya and its subproducts, equivalent to 18 percent of the total value of exports. The main buyer was China.

Soya is so profitable that many producers and provincial governments are turning their back on other crops, even orchards of fruit trees, or destroying forests to increase soya acreage.

Deputy Claudio Lozano, of the centre-left Argentine Workers’ Federation (CTA), said that “increasing the retentions on the extraordinary export profits from soya was essential to improve land use and to combat the loss of farm produce diversity.”

A critic of the government’s economic policy, Lozano said that “in order to achieve balanced and rational use of land in our country, and to bring profits down to a normal level,” it was necessary to increase the retentions.

However, he called for other measures to “rebuild the state,” and he also criticised the government for the lack of progress in preventing land being concentrated in too few hands.

Excerpt: