Argentina, Economy, Social Programs

Will the sun shine on Argentina?

Pablo Flores via Flickr

In the latest round of national protests, farmers and special interest groups have for the fourth time in three months hit the streets to block the transport of agricultural goods in rural sectors. This comes amid a long holiday weekend normally reserved for widespread regional travel, fueling frustration of many Argentines over the export tax debacle ensuing between agribusiness and the administration of Cristina Fernández de Kirchner.

Last Monday, June 6, President Fernández addressed the dispute publicly, outlining her justifications for increased taxes on food exports three months prior, particularly that of Soya (Soybeans):

“La medida tuvo por objeto dos finalidades esenciales: la primera y principal, la seguridad alimentaria, la soberanía alimentaria en la mesa de todos los argentinos. ¿Por qué? Se preguntaran ustedes, qué tiene que ver la soja. Los argentinos no comemos soja […] Es que los argentinos, compatriotas y amigos, toman leche, comen carne, comen pan y ahora pueden hacerlo más, inclusive, porque muchos han conseguido trabajo y todos han mejorado su salario, con lo cual el consumo ha crecido”

“La segunda parte es la redistribución del ingreso, de aquellos sectores que mayor rentabilidad tiene por distintas circunstancias”

“The measure was taken for two essential purposes, the first and principal, security of food resources, the sovereign supply on the table of all Argentines. Why? You might ask, what does this have to do with Soya? Argentines do not eat Soya […] It’s that Argentines, fellow citizens, and friends, drink milk, eat meat, eat bread, and now they can do more so, alas, because many have found work and all have increased their salaries, with which consumption has grown.”

“The second part is the redistribution of income, from those sectors that have greater profits through distinct circumstances. “

Beyond the subsequent weaving of morose history and the pious into her address, the argument boils down to this: The government sees fit to heavily tax agricultural industries that yield significant profit within the country but do little to directly benefit the Argentine populace. As such it is the place of her administration to redistribute a margin of these earnings to social ends, much to the tone of her husband’s prior agenda.

Of course, Argentine producers and landholders see this as an unwelcome and disproportional incursion by the state— a move to seize their earnings and steer business operations. This prospect has thus far been fought vehemently, with farmers disrupting food supply and disturbing public sentiment as the turmoil continues, even amid a relatively booming economy.

With tensions running their high point, former president, Néstor Kirchner, led an official march in favor of the President’s socioeconomic measure in downtown Buenos Aires, through the Plaza de Mayo on Saturday. In turn, as of midnight Sunday, new strikes have been rallied by Argentine farmers on the tail of this weekend’s road blocks and the brief detention of agrarian leader, Alfredo De Angeli.

While the Argentine Government made it clear the violence has been placated, one has to wonder how long this roller coaster can stay course before derailing. It is abundantly clear that this issue remains very divisive and unpopular within Argentina precisely because the administration’s hardline leads to both public speculation of darker days, and the inability to remedy it has spilled into daily life in terms of transportation, energy costs, and food availability.

Neither side seems apt to budge in the immediate future, but in the way of Argentine history, a myopic analysis often serves best. I, for one, see it very difficult for Kirchner to save face each time she rejects the validity of the opposition’s concerns and forges forward on a rigid policy line. In turn, if the agricultural sector cannot solidify their opposition to this policy and draft specific remedies with intentions to negotiate reasonably, a bitter showdown shall ensue.

Above all, a bit of perspective needs to be framed upon this dispute before its show tactics spiral into rancid infighting and deception; Argentina should be all but too anxious to revisit the decade’s roots over the taste of bitter Soya.