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Argentina's farm battle
Financial Times
May 12, 2008

Jude Webber

May 12, 2008

Argentine farmers will hold a slew of meetings this week with the governors of key agricultural provinces but an end to a two-month conflict over a new export tariff regime still looks far from imminent.

The farmers' latest weeklong strike targeting exports at a time of shrinking world supplies and galloping demand is scheduled to end on May 15, but farm leaders have already said they could prolong it unless the government shows a concrete desire for conciliation.

There were signs of progress last week and farmers were encouraged by what they said was the government's behind-closed-doors admission of flaws in the sliding scale export tariff regime introduced in March that led to an initial crippling 21-day strike. Furious, the government denied saying any such thing cabinet chief Alberto Fern ndez now calls the farmers leaders "crazy" and the fragile truce collapsed.

President Cristina Fern ndez, who has abandoned promises of a change of style and adopted the confrontational tactics of her husband and predecessor, N stor Kirchner, is digging in her heels on export tariffs, which she says are a just way to redistribute wealth and protect Argentines from surging food prices.

But with grain harvests sitting in white "silo bags" in fields pending a resumption of exports and Argentina's reputation as a reliable supplier at risk, the presidential pair should resist the temptation to be too vitriolic. Ms Fern ndez's popularity is falling and having already alienated the urban middle class, she cannot afford to lose key working class support nationwide. Nor should farmers be inflexible. Neither side has anything to gain from a dragging out the farm war.