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Argentine grains farmers seen nationalizing strike
June 5, 2012 / 6:27 PM / 6 years ago

Argentine grains farmers seen nationalizing strike

* Buenos Aires province raises property taxes

* Farmers in the province freeze grains sales in protest

* Growers meet to discuss possible nationwide strike

By Hugh Bronstein

BUENOS AIRES, June 5 (Reuters) - Argentine growers are expected to extend a freeze on grains sales in Buenos Aires province to include the whole country in protest at a local tax hike, a source at a leading farm group said on Tuesday.

Buenos Aires growers started a nine-day strike on Saturday over a recently-approved property tax increase, which they say will sap profits and force some farmers to sell their fields.

The provincial sales strike has raised concern among exporters eager to keep shipments flowing from Argentina, the world’s No. 2 corn and No. 3 soybean supplier.

Also ranked by interventionist government policies such corn and wheat export curbs, leaders of the South American country’s four main farm groups hunkered down in a closed-door meeting to decide whether to take the provincial protest nationwide.

The Argentine Agrarian Federation (FAA), one of Argentina’s principal farm chambers, is arguing to expand the strike beyond Buenos Aires, a source at the federation told Reuters.

“The proposal is for a national protest from Wednesday to Wednesday, not just against the tax increase but the other unresolved complaints as well,” the federation source said. “There’s quite strong support among the other (farm) groups.”

Grains trucks flowed at a normal pace into Argentina’s main port of Rosario, Santa Fe province, on Monday and Tuesday. But industry sources said the sales freeze slowed business at the port of Bahia Blanca in Buenos Aires province.

“The odds are pretty high that the strike will go national,” said one Buenos Aires farmer who asked not to be named.

“The farmers are not in a good mood. We are being hit at too many points at once,” said the grower.

Thanks to its fertile Pampas farm belt, bigger than the entire size of France, Argentina is also the world’s No. 1 exporter of soyoil, used for cooking and in the booming biofuels sector, and soymeal, used as animal feed.

Harvest estimates for the 2011/12 crop year have been cut due to extreme weather swings, starting with a December-January drought that parched fields at the height of the Southern Hemisphere summer and ending with the heaviest May rains in a century, which flooded those same fields.

Buenos Aires Governor Daniel Scioli needs more tax revenue to help shore up provincial finances ahead of a possible 2015 presidential run. He is seen by Wall Street as the best hope for a market-friendly leader to succeed President Cristina Fernandez at the end of her second term.

Scioli says he’ll run if Fernandez, who has increased the state’s role in the economy, does not seek a change in the constitution to allow her to seek a third term.

Scioli says the tax hike is structured “progressively”, exempting 62 percent of the province’s farms and granting exemptions for growers in the remaining 38 percent who were hit hard by drought and flooding during the 2011/12 season.

Argentina’s Agriculture Ministry expects soy output of 41.5 million tonnes this season after the dry spell dashed early-season hopes of a bumper crop. Corn production is seen by the ministry at 20.1 million tonnes, way under the record 30 million tonnes originally forecast.

Export companies with operations in Argentina include Cargill, Bunge and Noble. (Additional reporting By Nicolas Misculin;editing by Sofina Mirza-Reid)

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