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Seven Questions for an Argentine Farmer

March 30th, 2008 | Categoría: Culture, Politics

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Soybeans are to Argentina what oil is to Saudi Arabia

Argentine farmers and ranchers, tired of what they call “abusively high confiscatory taxes,” have brought the government to its knees with what may be the biggest agricultural strike in Argentine history. The strike (which includes hundreds of related daily street protests in the nation’s interior, as well as the blocking of roads and the refusal to sell farm products) is entering its third week. The strike has had a major impact on Argentine politics. But if it goes on any longer, it may also affect people’s basic consumption patterns. Since farmers are no longer selling beef, chicken, milk, wheat or other goods, supermarkets are finding it harder to stock these items. So what’s all the huff about?

The Argentine Post asked Andres Rosenberg, a farmer from Buenos Aires Province, to help us understand why farmers are upset. Andres manages farms in Buenos Aires and in Entre Rios. He produces corn, soybeans and wheat. He also raises cattle and produces the kind of beef that has helped make Argentina famous.

1) Do you support the farm strike?

Not the strike. I support the complaint that farmers are making. I believe in dialog. Having said that, this government does not listen to others. So the strike is, apparently, the only way to get the government to listen to our ideas. However, this complaint, which began years ago as a simple farmers’ complaint, has now become a political and social complaint shared by many people in society. This may escalate into an even bigger problem that will be harder and harder to resolve through negotiation. And as long as the government refuses to negotiate, it is possible, I’m afraid, that this will turn into something that leads to tragic consequences.

2) How important is agriculture to the Argentine economy?

Very important. Since 2003, when the “retenciones” or export taxes began, the government has collected over US $40 billion from farmers. More than a third of all the jobs in Argentina are directly or indirectly related to agriculture. Argentine history indicates that when the agriculture sector does well, the country does well.

3) President Cristina Kirchner and her husband (former president Nestor Kirchner) have accused farmers of lining their pocketbooks while other Argentines suffer from poverty. Is this true? Are farmers rich?

Farmers are making money now. Rich? That requires a perfect definition. However, because farmers are doing well, the whole commercial chain is doing well. The interior of Argentina is doing well because farmers are contributing to the development of small regional economies. Farmers stimulate the buying of food, industrial goods, services, and transport, etc. There are many towns and cities that are alive and thriving because of farmers. Examples include Las Parejas, Armstrong and others. These communities are growing thanks to the agriculture sector. Farmers invest a lot in their communities and this is reflected in growth and rural development. But there are many sectors of the economy that are making money.

4) What do you think of President Cristina Kirchner?

She is creating a kind of political and social division between farmers and average citizens that was heretofore nonexistent. She lacks understanding and political skill. I will keep my other opinions about her to myself.

5) What did you think of her speech Tuesday night (the one that led tens of thousands of people to take to the streets in Buenos Aires and across the country)?

It was absurd. It did nothing but create more conflict. Apparently, she seems to dislike people who make money. That’s my opinion. But if that is the case, she should tell it like it is and simply say so. It seems that making money in Argentina is a sin.

6) Do you think it’s fair for farmers to pay any kind of export tax?

I would agree much more with the idea if that money stayed in its place of origin. Export taxes are national taxes that are not shared with provincial or with municipal governments. They are a tax on production that takes place in provinces and in rural areas. What happened with the $40 billion that the government has collected since 2003? How has the government spent that money? These funds are never reinvested in local economies and that is where, I believe, they are most needed. Export taxes that total as much as 44% are illogical.

7) What should the government’s farm policies look like?

I am not an economist, so any ideas I might have should not be taken too seriously.

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2 Comments

yanqui mike says:

Good post. Thanks. Saudi Arabia of Soya might be a little strong, tho. The US is far and away the biggest exporter of soy with Brasil being second. We are proudly a only recent third.

Taos Turner says:

Hey Mike.

True. But I wasn’t saying that Argentina is the world’s leading soybeans producer. My point was that Argentina depends on revenue from soybeans in much the same way that Saudi Arabia depends on oil for its revenue.

For anyone interested, the U.S. Department of Agriculture expects 2007-08 world soybean production to look like this:

U.S. 70.4 million metric tons
Brazil 61 million metric tons
Argentina 47 million metric tons

That means these three countries along account for 81% of all the soybeans produced in the world.

Argentina is also the world’s No. 2 corn producer (21 million metric tons compared with 332 million in the U.S.) and a top 10 wheat exporter (15 million tons compared with 56.25 million in the U.S.)

Cheers,
Taos

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