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Argentina: The Countryside and Social Conflict

During the last two months, the Argentinean political agenda has been marked by the conflict between the government and “the countryside,” a generic denomination that groups everything from big land owners, to private companies that rent the land for soybean harvesting, to small producers, and rural workers. The problem started when the Government announced its decision to increase the taxes on agricultural product exports, particularly grains. This tax is known as “retentions” and it allows the Government to obtain a part of the total sales revenue, which brings in much revenue for the producers, due to the economic policy which in the last years has maintained a high dollar value in relation to the local currency. The result: it's quite convenient to export, since you obtain dollars and local prices are in -lower in value- pesos. While this scene is changing because of the high local inflation rate, there's still many incentives to sell abroad. The raise of retentions was based on a mobile scheme: if the international price increases, so does the tax rate.

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Photo of Roadblock in Córdoba province taken by Pablo David Flores and used under a Creative Commons license.

For example, currently, the soybean industry pays 40%-45% taxes. The increase led to a rough conflict: for weeks, the sectors linked to the countryside closed the roads and didn't allow the circulation of trucks with grains, milk and meat. The result was a shortage of many basic products in the big cities. While the measures where temporarily dropped on two occasions, there's still a high degree of conflict going on between the Government, who hasn't lowered taxes, and those sectors linked to the countryside, which demand a decrease in taxes.

But, how have bloggers covered the topic of the conflict between the Government and the countryside? Let's see some opinions.

Let's start by the side of those who have a critical view of the protest measures of the sectors linked to the countryside. At Debate¨Politico [es] they published a text by Adolfo Perez Esquivel, a defendant of human rights in Argentina and Nobel Peace Prize winner, who sustains that “large national and international soybean companies are manipulating and pressuring the Government to lower the retentions. They make millions, but they want more and more, and they don't care about environmental damage, the consequences of monocultives, the reduction of natural forests, the indiscriminate use of agro-toxins, and the health and nourishment of the population.” At Arte Política [es] they reproduce a communique from the Frente Campesino (Rural Farmer's Front), where they criticize the measures of the sectors linked to the countryside. At Claro de Luna [es] they analyze and criticize the posture of the sectors in favor of the strong measures by the rural sectors, which tried to identify the “countryside” with “the country”. And finally, at Los Tres Chiflados [es], a group blog of economists, Larry, one of the authors, still expects an apology “for the second most antidemocratic act since the return to democracy”, in reference to the decision of sectors linked to the countryside to close the roads and cause a shortage of food products in the big cities.

Before going to the blogs that criticizes the Government and had a closer position to the countryside, you can check out two interesting materials. On one side, Andy Tow [es] mapped the location of road closing and the Gini coefficient, which measures the degree of economic inequity within the population. His conclusions: where there's more income equality, there were more protests. But, and this is interesting, there were also a coincidence between the areas of protests and soybean harvesting areas, the ones that received the highest taxes. On the other side, a group of people from Entre Rios province, who are in the design field, made a drawing of the Argentinean president, Cristina Fernandez, in a soybean field.

The other side opted for defending the countryside and this included harsh criticism against the Kirchner's government. One of the interesting points is that many blogs that are dedicated to defend the countryside position were created by producers that participated in the protests. At Marca Liquida [es], they criticized the Government's speech about the negative consequences of the soybean harvest; for instance, that it doesn't generate employment. At Patria Chacarera [es], they argue that the Government doesn't want to solve any of the problems that led to conflict and that, in fact, they're provoking more protest measures. This blog, by the way, has as a goal to publish posts that sustain the reasons by which retentions are unfair fiscal measures. Another blog, Viva el Campo [es] is gathering signatures for an Internet claim, with the objective to impulse the measures that led to the raise of retentions. A group of producers from Trenque Lauquen, province of Buenos Aires, have created a site [es] to tell their reasons for supporting the protest measures. And at Refundar la Republica Argentina [es] they don't hold back in attacks and insults for the Government's agriculture policy.

These days, the groups that represent sectors of the countryside have stopped the protest measures and have started negotiations with the Government again, looking to modify the increases in the taxes to exports. But the agreement, for now, doesn't seem too close.

6 comments

  • At least they are the table negotiating – the sides have such diametrically opposed viewpoints – this will be interesting to follow.

  • […] casi tres meses, a los impuestos por exportación de granos. El texto está disponible en español, inglés, portugués, italiano y bengali. La idea de la entrada no es analizar el tema; más bien, es […]

  • nick

    The problem could be easily solved with rational economic policies, but this problem its not about the monocultives and the enviromental damage, its about money. These policies should include all the countryside production, milk , meat, etc. making them rentable so the farmer will no longer invest in the soya bean that is known as a soil destroyer-
    During many years the international situation convinced the goverment to incourage this invasive production, now they started to notice the lack of all the other farm products, due to their own political determinations.
    Inspite of this, there is a critical situation within the country, hidden inflation and poverty rates, are actually increasing, as well as the foreign debt.
    As an argentian Im sad of seeing this going the wrong way. I HOPE, I WISH a better place for all of us and our children too.

  • […] Harsh criticism and protests against the political agenda of Argentina’s economic policy and its government’s decision to increase the taxes on agricultural product exports. […]

  • […] sticking out of the bottom of his t-shirt. He was complaining to a much older friend about the 20-day agricultural strike that has left grocery stores without meat and factories without grain. “They protest, […]

  • Same story in Argentina. They are growing up in his economy, doing exportations very well and suddenly goverment wants to take internal advantage of every business. For many years “The Campo” had to work very hard withouth any help of the state.. Summary: Now Uruguay is exporting more than Argentina..

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