Argentine farmers hint at end to protest

Argentine farmers hint at end to protest

By Jude Webber in Argentina

Published: May 19 2008 23:55 | Last updated: May 19 2008 23:55

Argentine farm leaders on Monday indicated they were ready to end a strike that has halted grain exports, boosted international soya prices and delayed wheat planting.

“We’re ready to sit down to negotiate,” said Hugo Biolcatti, vice president of the Sociedad Rural, one of the country’s big four producers’ groups. “The situation has changed.”

Argentina’s farm sector powers the economy and producers have cashed in on soaring commodity prices with surging exports – the country is the world’s leading exporter of soya oil, the third of soyabeans and sixth of wheat.

But the conflict has come at a time of global food crisis and fears of tighter supplies have put upward pressure on international soya prices. Farmers staged a crippling 21-day strike, that ended in April, over a new sliding scale of export tariffs and resumed their action after negotiations during a month-long truce collapsed.

The latest strike, which has paralysed grain exports for two weeks in a bid to hit the government in its wallet, is scheduled to end on Wednesday. But polls show public opinion is tiring of the protest and Mr Biolcatti said: “We can’t ignore that.”

There was no immediate reaction from the government but Cristina Fernández’s popularity has plunged during the protest amid criticism from within the president’s party and increasing questions about how long she can stick to policies fuelling growth while distorting local markets with export tariffs and subsidies.

The government says it needs to redistribute wealth and to protect Argentines from soaring food prices, but it has done nothing to tackle serious inflation widely believed to be running at three times the official rate.

A drought in northern and central Argentina has compounded the strike. Eduardo Anchubidart, head of the Cereals Exchange’s agricultural forecasting department, reckoned only 300,000 hectares of wheat had been sown so far, down 14 per cent on a year ago.

●Demand from the biofuel industry for crops such as corn and soyabean is only a small factor behind the ­global increase in food prices, the US government said on Monday, writes Javier Blas in London.

Ed Schafer, the US agriculture secretary, said that the biggest factor was the increase in oil prices, which was lifting production costs through rising costs for ­fertiliser, diesel and transportation. “It is clear that [biofuel demand] has some impact, but is not the biggest factor,” Mr Schafer said.