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Argentine farmers suspend blockades aimed at tax hike

Other News Materials 29 March 2008 04:42 (UTC +04:00)

( dpa ) - Agricultural producers in Friday suspended a two-week road blockade aimed against an export tax hike.

The blockades have caused some food scarcity in urban centres.

The country's four federations of agricultural producers said they were suspending the protest against new taxes on agricultural exports, in the hope for a successful dialogue with Argentine President Cristina Fernandez de Kirchner.

Fernandez de Kirchner, a centre-left populist, has remained resolute, two weeks into the conflict with organized agricultural interests.

"I will not be subjected to extortion," she warned Tuesday.

By Thursday, however, her tone was more conciliatory as she called for dialogue.

Argentine agriculture has prospered in recent years amid high prices on world commodity markets and from the devaluation of the Argentine peso.

With its new taxes on agricultural producers, Fernandez de Kirchner's government is seeking to lay claim to a large share of the farmers' earnings for redistribution to poorer segments of society.

Authorities also hope that high export taxes will keep more produce at home, lowering domestic prices and helping to curb rising inflation.

The current crisis was triggered by new export taxes, which are designed to escalate with the price of soy on world markets. The formula would effectively give anything above 600 dollars a ton for soy exports to government coffers; the current price is around 470 dollars a ton.

The mostly conservative farmers' unions have denounced such an export tax policy as "robbery."

Late Tuesday, thousands of Argentines protested the agricultural policies of President Fernandez in the largest demonstrations since late 2001 during Argentina's economic collapse.

The rallies late Tuesday saw a revival of "cacerolazos," protests made loud by banging on pans.

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