(Recasts lead, adds comments from Fitch Ratings)

By Walter Brandimarte

NEW YORK, March 26 (Reuters) - A strike by farmers highlights Argentina's institutional weaknesses and justifies the country's low credit ratings, Standard & Poor's and Fitch Ratings said on Wednesday.

Both rating agencies said the two-week-long strike, which farmers vow to keep up until the government repeals a tax increase on grains exports, should not lead to rating downgrades for Latin America's No.3 economy, at least for now.

The protests have led to shortages of meat and dairy products, paralyzed local grain and livestock trading and forced major exporters of soy products to renege on some contracts.

"We're not going to downgrade the rating because of this, because it is only 'B+'," Joydeep Mukherji, a director with S&P's sovereign ratings group, said in a telephone interview.

"If you look only at the (economic) numbers, Argentina would have a higher rating, but we have to adjust the wonderful numbers with institutions, political history and other factors that are qualitative," he added. "The ratings actually reflect a lot of weaknesses and this is one of them."

Argentina has been growing by more than 8 percent a year for the last five consecutive years and the government has been able to post a primary budget surplus, despite increased expenditures last year ahead of presidential elections.

But an important part of the growth in government revenues is based on the export taxes that farmers are opposing and fiscal deterioration would be the main concern for S&P, from a ratings standpoint, Mukherji said.