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Viewing cable 08BUENOSAIRES665, ARGENTINE FARM STRIKE EXTENDED SIX MORE DAYS

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Reference ID Created Released Classification Origin
08BUENOSAIRES665 2008-05-19 10:18 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #0665/01 1401018
ZNR UUUUU ZZH
R 191018Z MAY 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 1074
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
UNCLAS BUENOS AIRES 000665 
 
STATE FOR ECON WHA/BSC 
USDA FOR FAS/OA/OSTA/OCRA/ONA/OGA/OTP/OCBD/OAO/OFSO 
MERCOSUR COLLECTIVE 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR ECON EINV PGOV ELAB PHUM AR
SUBJECT: ARGENTINE FARM STRIKE EXTENDED SIX MORE DAYS 
 
REF: Buenos Aires 0615 and previous 
 
------- 
Summary 
------- 
 
1. (U) The farm groups leading the Argentine agricultural strike 
announced on May 15 that the strike will continue, despite a call 
for further dialogue from President Cristina Kirchner.  The farm 
groups will meet again on May 21 to review the situation and decide 
whether to continue the strike.  The farm groups sent a letter to 
the President asking for a meeting to discuss their issues.  In an 
effort to increase pressure on the GoA, they will hold a large 
protest in Rosario on May 25, Argentina's Independence Day and the 
fifth anniversary of the Kirchners' combined rule. The farm strike 
has been successful in blocking sales and internal transport of 
grains and oilseeds, and current exports are limited to stocks 
placed in the ports prior to resumption of the strike.  The farm 
sector's decision to extend the strike is being perceived as an 
aggressive move on their part in the light of the President's most 
recent remarks, which are being widely interpreted as conciliatory. 
The parties are now in a vicious circle, with the farm sector 
stating they will not end the strike until the government offers 
some concrete measures, and the President's people saying she will 
not meet with sector representatives until they lift the strike. 
End Summary 
 
2.  Farm leaders announced on May 15 that they will continue the 
farm strike - a continuation of the original three-week strike 
initiated on March 13 that was suspended from April 2 to May 7.  The 
strike has paralyzed marketing of grains and oilseeds for the last 
week.  They did not set a limit on how long the strike will last, 
but will meet again on May 21 to review the situation.  They will 
continue protests on the major highways, although they will only 
limit movement of grains and oilseeds for export in order to 
guarantee food supplies to the major cities.  The farm groups will 
also organize a large protest in Rosario (the second largest city in 
Argentina and the center of its agricultural industry) on May 25, 
the national day of Argentina, and the same day President Kirchner 
had previously targeted to announce a series of broad social pact 
(reftel) and political renovation initiatives linked to the upcoming 
2010 Bicentennial, and the fifth anniversary of combined Kirchner 
rule.  The planned "Social Pact", part of a "re-launching" of the 
administration, appears to have been postponed due to the ongoing 
farm dispute. 
 
3.  (SBU) The farm sector's decision to prolong their action caught 
many by surprise given that it came in the wake of a more 
conciliatory speech by President Cristina Kirchner on May 14, when 
she called for suspension of the strike and resumed dialogue. 
Initial responses from farm sector leaders immediately following the 
President's speech seemed to indicate they had found enough positive 
in her comments to lift their action.  This was not the case, 
however, as the following day they announced the strike's 
continuation. The farm leaders asked for concrete measures from the 
GoA in order to lift the strike.  In particular, they asked that the 
GoA acknowledge up front that any discussions specifically include 
possible modifications of the variable export tax regime put in 
place on March 11, and that the GoA fully implement the wheat and 
beef agreements negotiated in April during the previous truce in the 
strike.  The farm groups sent a letter to the President asking to 
meet with her and outlining their demands.  While no formal GoA 
response has been forthcoming, frequent GOA unofficial spokesperson, 
national deputy Carlos Kunkel, stated May 15 after a meeting with 
President Kirchner that there would be no negotiations with the farm 
sector unless the strike is lifted. 
 
4.  (SBU) The ongoing strike has been successful in blocking 
movement of grains and oilseeds for export within Argentina since it 
resumed on May 7.  Local producers are refusing to sell grains and 
oilseeds, and protestors on the main highways are blocking trucks 
moving grains and oilseeds to the ports.  Some of the groups (most 
prominently in Entre Rios province) are maintaining intermittent 
blockades of other traffic, including international transport with 
Brazil and Uruguay.  Local contacts report that inland soybean 
crushing plants have already been forced to suspend operations, 
while soybean processing plants at the ports (the majority of the 
crushing plants) are currently limited to using oilseeds bought and 
stored before the resumption of the strike.  While estimates vary, 
it appears that stocks in ports are only sufficient to allow 
continued operation for another week or two.  The major export 
companies have suspended purchases of grains and oilseeds pending 
resolution of the strike. 
 
5. (SBU) COMMENT:  Local commentators have expressed surprise at the 
refusal of the farm groups to suspend the strike after the more 
"conciliatory" speech of President Kirchner.  Contacts in the 
agricultural sector indicate, however, that there is a high degree 
of anger and suspicion among protestors in the rural areas.  The 
main complaints are the refusal of the GoA to discuss the variable 
export tax and its failure to implement the beef and wheat 
agreements negotiated during the previous truce.  There seems to be 
a feeling, somewhat justified, among the farm groups that the GoA is 
willing to talk, but it is not willing to make any concessions. 
Leaders of the farm groups suspended the original 21-day strike on 
April 2 after a similar call for dialogue by President Kirchner, but 
made little progress in subsequent discussions.  The hard-line 
position of the farm groups is now being driven by their 
increasingly restive base of small and medium producers which is 
relatively autonomous and, with this year's crop harvested, ready 
for a long struggle.  Continuation of the strike, however, runs the 
risk of undermining public support for the rural sector.  While the 
general public has been sympathetic to the farm protest, there is 
also a strong desire to see an end to the dispute.  The risk for the 
GoA is that it might win the battle and lose the war.  Investment in 
the agricultural sector, a motor of Argentine economic growth, is 
being undermined by the conflict and a number of government policies 
while rural area governors, legislators, and other officials are 
increasingly feeling the pressure from constituents to support their 
cause, creating serious tensions within the Kirchners' governing 
coalition. END COMMENT 
 
WAYNE