UPDATE 1-Argentine farmers may extend strike truce

Mon Apr 28, 2008 11:17pm BST
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(Recasts, updates with market close, adds farm group's letter)

By Nicolas Misculin

BUENOS AIRES, April 28 (Reuters) - Argentine farmers angry over an export tax hike signaled on Monday they might extend a deadline set for talks with the government to avert the resumption of a strike that hit grains shipments last month.

Farmers voiced hope that talks with the government could move forward following the resignation four days ago of former Economy Minister Martin Lousteau. Many farmers blamed Lousteau for implementing a new sliding-scale tax scheme on grains exports that hiked the levy on soy and sunseeds.

"If we start with the assumption that Lousteau committed an error, there are chances that some things can be revised," said Eduardo Buzzi, president of the Argentine Agrarian Federation (FAA). "If some clear conditions emerge, it's easier and likely we can (keep talking) beyond May 2," he told local television.

"We're willing to negotiate until the last minute," said Hugo Biolcati, vice president of the Argentine Rural Society (SRA), adding that the government had yet to contact farm groups to restart talks this week.

Farmers staged a three-week strike last month over the tax change, hampering grains exports and causing food shortages.

The farmers declared a one-month truce to negotiate, but then threatened to resume their strike on May 2 if the talks break down. So far almost nothing has been agreed.

Increased investor optimism for a government deal with the farmers boosted Argentine bonds and stocks on Monday. Financial markets had slumped last week amid the threat of a renewed strike and news of Lousteau's resignation due to apparent differences with President Cristina Fernandez over how to combat inflation.  Continued...

 
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