Argentine Farmers Ready To Strike
Argentine farm leader Eduardo Buzzi, head of the Agrarian Federation, is reported as saying that farmers there are ready to withhold grain in protest to the government's lack of action on the drought crisis gripping the nation and the maintenance of taxes at crippling levels.
In a carbon copy of last springs action, Argentine farmers are said to be prepared to restrict grain movements for a week, with a view to extending their actions further if the government fail to meet their demands.
After harvesting a wheat crop of only around 8.5mmt this year compared to 16mmt last season, farmers are now faced with soybean losses of around 25% and a corn crop up to 40% lower according to the Buenos Aires Cereals Exchange.
In 2008 Argentina was the world's largest exporter of soymeal & oil, the second largest corn exporter, the third largest soybean exporter and the fifth largest wheat exporter.
All those exports are heavily taxed by the government. According to Buzzi, Argy farmers will lose $15 billion in revenue due to tax and the drought this year.
Unfortunately for the government they have got themselves into a situation of over-milking the cash cow that is Argentine agriculture. The truth of the matter is that they can't afford to reduce export taxes because their entire fiscal budget depends too heavily on them. Serious strike action and civil unrest seems inevitable.
Inflation in the country is currently running at 9% according to the government. According to economists the real rate is more like 25-30% and Joe Public is already hoarding food, see video:
In a carbon copy of last springs action, Argentine farmers are said to be prepared to restrict grain movements for a week, with a view to extending their actions further if the government fail to meet their demands.
After harvesting a wheat crop of only around 8.5mmt this year compared to 16mmt last season, farmers are now faced with soybean losses of around 25% and a corn crop up to 40% lower according to the Buenos Aires Cereals Exchange.
In 2008 Argentina was the world's largest exporter of soymeal & oil, the second largest corn exporter, the third largest soybean exporter and the fifth largest wheat exporter.
All those exports are heavily taxed by the government. According to Buzzi, Argy farmers will lose $15 billion in revenue due to tax and the drought this year.
Unfortunately for the government they have got themselves into a situation of over-milking the cash cow that is Argentine agriculture. The truth of the matter is that they can't afford to reduce export taxes because their entire fiscal budget depends too heavily on them. Serious strike action and civil unrest seems inevitable.
Inflation in the country is currently running at 9% according to the government. According to economists the real rate is more like 25-30% and Joe Public is already hoarding food, see video:
