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Viewing cable 09BUENOSAIRES1117, Argentina Upgrades Agriculture to Ministry Level, Appoints

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Reference ID Created Released Classification Origin
09BUENOSAIRES1117 2009-10-08 20:38 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #1117/01 2812038
ZNR UUUUU ZZH
R 082038Z OCT 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4463
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAEPA/HQ EPA WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
UNCLAS BUENOS AIRES 001117 
 
USDA FOR FAS/OA/OCRA/ONA/OGA/OFSO 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EAGR SNAR ECON EINV PGOV ELAB PHUM TBIO AR
SUBJECT:  Argentina Upgrades Agriculture to Ministry Level, Appoints 
New Minister 
 
1. (SBU) Summary:  On October 2, Argentine President Fernandez de 
Kirchner created a Ministry of Agriculture to be headed by Kirchner 
loyalist Julian Dominguez.  This change upgrades the agriculture 
portfolio to a Ministry level - a status it had not held since 1981, 
despite Argentina's role as a global agricultural player.  Minister 
Dominguez has been a fixture of both Kirchner presidencies; he is a 
lawyer and does not have a background in agriculture.  In addition, 
the announced changes place Argentina's controversial Agricultural 
Control Office (ONCCA) under the direct control of Minister 
Dominguez -- a loss of power for tax agency chief Ricardo Echegaray. 
 The changes also create a new Ministry of Industry and Tourism to 
replace the former Ministry of Production.  Minister Deborah Giorgi 
will remain as head of the smaller Ministry.  Chief of Cabinet 
Anibal Fernandez appears to be the real benefactor of this shifting 
power dynamic, given his close ties with Dominguez.  Farm leaders 
are clearly pleased with the higher political status accorded to 
agriculture, but are not overly optimistic that this change will 
transform their confrontational relationship with the government. 
End Summary. 
 
------------------------------------------- 
Agriculture -- From Secretariat to Ministry 
------------------------------------------- 
 
2.  (SBU)  Following weeks of rumors about the future of Argentina's 
agricultural political landscape in the wake of Agriculture 
Secretary Carlos Cheppi's announced resignation, President Fernandez 
de Kirchner published decrees creating a new Ministry of Agriculture 
to be headed by Julian Dominguez on October 2.  The change upgrades 
agriculture to Ministry level - a status it had not held since 1981. 
 Prior to this recent change, Argentina had surprisingly been one of 
a very few countries in Latin America that did not accord its top 
agricultural official Ministerial status. 
 
3. (SBU) Julian Dominguez is a former mayor of the Buenos Aires 
province town of Chacabuco (1995-1999); and he later served as the 
Minister of Public Works for the Buenos Aires province under 
Governor Carlos Ruckauf.  He was elected as a provincial 
Representative for Buenos Aires in 2007, and served as 
vice-president of the lower house prior to being appointed Minister 
of Agriculture.  Minister Dominguez is a staunch ally of the 
Kirchner couple and has been strongly supportive of government 
policies during both Kirchner presidencies.  He is a lawyer and does 
not have a background in agriculture. 
 
------------------------ 
A Shifting Power Dynamic 
------------------------ 
 
4. (SBU) In addition to creating the new Ministry of Agriculture, 
the announced changes place Argentina's controversial Agricultural 
Control Office (ONCCA) under the direct control of Minister 
Dominguez.  ONCCA has wide- ranging powers, including responsibility 
for agricultural export authorizations and administration of subsidy 
programs for the sector.  ONCCA had previously been controlled by 
Ricardo Echegaray, Argentina's current tax czar (head of AFIP), 
through his appointment of Emilio Eyras as President of the agency 
in 2008 when Echegaray was moved to head AFIP.  Minister Dominguez 
inherits oversight of ONCCA amid a wave of corruption allegations 
directed at the agency.  ONCCA is currently under judicial review 
for "irregularities" and "bribe requests" surrounding payment of 
subsidies totaling more than AR$13 million.  Although Dominguez has 
official oversight of ONCCA, it remains to be seen how much decision 
autonomy he will be granted.  Press reports indicate that former 
President Nestor Kirchner picked Juan Manuel Campillo, a strong 
Kirchner ally, to replace Eyras as ONCCA chief. 
 
5. (SBU) Agriculture previously had been in the hands of a 
sub-cabinet secretary who reported to Production Minister Deborah 
Giorgi.  Carving agriculture out of Production leaves Giorgi with a 
smaller agency, which has been renamed the Ministry of Industry and 
Tourism.  Minister Giorgi will remain as head of the smaller 
Ministry.  Echegaray and Giorgi have clearly lost power in this 
restructuring.  Post contacts opine that Cabinet Chief Anibal 
Fernandez appears to be the real benefactor of this shifting power 
dynamic due to his close ties with, and influence over, Dominguez. 
 
 
--------------------------------- 
Farm Sector Pleased But Cautious 
--------------------------------- 
 
6. (SBU)   Farm leaders are clearly pleased with the political 
upgrade to agriculture in the Cabinet.  In June, the farm sector's 
Liaison Board (composed of leaders of the four main farm groups) 
presented Cabinet Chief Fernandez with a document containing 22 
action items to improve the sector's situation.  One of those items 
was to give more political weight to the Secretariat of Agriculture. 
 To that end, the farm sector was pleasantly surprised by the 
creation of the Ministry, given previous failed attempts to make 
headway in the more than year-old conflict with the government.  The 
sector's underlying suspicions are possibly best summed up by 
Argentine Rural Confederation (CRA) vice-president Nestor Roulet's 
public statement that "the new Ministry of Agriculture brings us a 
strange mix of hope and distrust." 
 
7. (SBU)  On October 6, Minister Dominguez held his first meeting 
with the Liaison Board.  Although the meeting was protocol-based, 
Dominguez reiterated the need to depoliticize and bring an end to 
the conflict.  He presented farm leaders with his proposed work 
methodology to reach that end.  He plans to begin negotiations with 
the Liaison Board next week by addressing technical concerns in the 
conflict.  Farm leaders are not convinced this "technical" path is 
the quickest way to a resolution -- they believe that the conflict 
is more political than technical.  Argentine Rural Society (SRA) 
president Hugo Biolcati reportedly told Minister Dominguez that the 
farm sector's principal problem is "loss of working capital and 
government intervention in the market."  However, Argentine 
Agricultural Federation (FAA) president Eduardo Buzzi hopefully 
noted to the press after the meeting that the Minister "showed some 
level of independence." 
 
------- 
Comment 
------- 
 
8. (SBU) It comes as a surprise that the Kirchner government gave 
agriculture a ministry in the Cabinet.  Given Argentina's status as 
a world agricultural powerhouse, the change is long overdue. 
However, the ag sector remains skeptical that this change will be 
anything more than window dressing.  The lack of background in 
agriculture of both of the GOA's newly appointed officials at the 
Ministry of Agriculture and ONCCA leaves some doubt as to their 
ability to resolve the dispute between the government and the farm 
sector that began in March 2007 over export taxes.  The farm 
sector's meetings with Minister Dominguez (as well as the 
Ambassador's pending courtesy call with him) in the weeks to come 
should reveal whether there is real hope for an end to the conflict. 
 
 
MARTINEZ