After months of conflict, Argentina ends disputed farm tax

RIO DE JANEIRO, Brazil — More than four months of political turmoil that had paralyzed much of Argentina ended Friday when President Cristina Fernandez de Kirchner suspended a controversial increase in grain-export taxes that had angered the country's powerful farm sector.

The action came a day after the country's Senate dealt the president a stinging defeat by rejecting legislation ratifying the tax increase, which the government had implemented by decree in March. Vice President Julio Cobos defied the president by casting the deciding negative vote in the Senate.

Since March, the country's main four farm groups have protested the new sliding scale of export taxes by blocking roads and withholding production, which sparked scattered food shortages and froze the country's grain-export markets. Argentina is a major producer of soybeans, wheat and other grains, and the farm strike has strained already tight world supplies.

The farmers had argued that the new taxes, which immediately hiked soybean export tariffs to nearly 45 percent, would drive smaller producers out of business. Friday's action returns those taxes to a previous fixed system, which was set at 35 percent of export revenue for soybeans.

While declaring the end of the farm conflict Friday, farm leaders said they would continue to push the government to help small- and medium-sized farmers hit by rising fertilizer, seed and other costs.

"This doesn't represent the definitive resolution of the agricultural sector's complaints," said Silvio Corti, a leader of the Argentine Agrarian Federation. "We still need to address the crisis that farmers are facing."

Political analyst Ricardo Rouvier said the farmers came out of the conflict far stronger and more united than when they entered it, while Fernandez de Kirchner and her husband, former President Nestor Kirchner, have suffered heavy political losses.

Polls show Fernandez de Kirchner's approval ratings plummeted from about 55 percent before the conflict to about 20 percent this month, an unprecedented drop after only seven months in office.

"The government's main error was to turn this conflict into a political one and to adopt an all-or-nothing attitude," Rouvier said. "Now, the Kirchners need to rebuild the president's image, but it's unclear whether that's possible at this stage."

During the conflict, the Kirchners struck back at the farmers by accusing them of plotting a coup against the government and of refusing to share record profits with the rest of the country. The government also had organized repeated street rallies to support its position.

In suspending the tax Friday, Fernandez de Kirchner continued the rhetoric by accusing farmers of resorting to violence and intimidation in their protests.

"The debate showed a democratic exercise inside the institutions, but a mark of aggression and pressure of all kind exercised against legislators and their families," the statement said.

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