Argentine farmers to end strike, warn of more protests

Argentine farmers said they would allow a one-week freeze on grains sales to end as planned on Tuesday, but threatened to stage more anti-government protests against taxes and export curbs.

The sales strike was called by growers angry about state-centric agricultural policies and a recent tax increase in No. 1 soy- and corn-producing province Buenos Aires. Argentina is a top exporter of both crops at a time of growing world demand. Exports from the country were not affected by the sales freeze, as dockside silos had been topped off with freshly harvested reserves just before the protest began.

Farmers punished by extreme weather this season were eager to end the sales strike in order to get much-needed cash. Leaving the door open to more anti-government demonstrations, the country's main farm groups said the sales strike would end at midnight Tuesday.

"We're ending this protest, but that doesn't mean the struggle is over," Eduardo Buzzi, head of the Argentine Agrarian Federation (FAA), said at a news conference. Argentine farmers are harvesting the last of their 2011/12 corn and soybeans after a spate of production estimate cuts that left many growers worried about cash flow.

"We cannot hold our products back from market indefinitely," said Jorge Garat, who has a 1,300-hectare grains farm in the western Buenos Aires town of Trenque Lauquen. Garat saw crop yields fall this season due to a drought that hit Argentina's grains belt in the December-January dog days of the Southern Hemisphere summer. Yields were further cut by record May rains that swamped some of the same Buenos Aires fields that had been parched by the sun at the turn of the year.

The government expects soy production of 41.5 million tonnes this season after the six-week dry spell dashed initial hopes of a bumper crop. The Agriculture Ministry expects corn output of 20.1 million tonnes, far below the record 30 million tonnes foreseen by officials at the start of planting.

LONG CRITICIZED
Global food demand is expected by the United Nations to double by 2050 as world population hits 9 billion. With the vast and highly fertile Pampas grains belt, Argentina will be a key food supplier over the decades ahead.

But the country's growers have long criticized President Cristina Fernandez for scaring away investment with policies that increase the state's role in the economy. They say profits are hurt by wheat and corn export curbs imposed by her government to ensure ample domestic food supplies. Even before the Buenos Aires land tax increase was announced last month, farmers complained about the 35 percent tax that the government puts on soybean exports.

Argentina is the world's top exporter of soyoil, used in the booming international biofuels sector. It is also the No. 1 supplier of soymeal, used as cattle feed, particularly in China, where the emerging middle class is clamoring for beef steaks.

Trading companies with operations in Argentina include Cargill Inc, Bunge Ltd Molinos Rio de la Plata, and Noble Group Ltd.

Flow of grains trucks into Argentina's main port of Rosario slowed to a trickle this week due to the sales freeze, causing some traders to start getting nervous about reserve stocks. "We have not stopped (exporting), but we would not be able to go on much longer if the sellers' strike were to continue," one Rosario-based export company executive said.

Only 1,000 trucks entered the port in the 24 hours through mid-morning Tuesday, down from 4,600 on the same day last year, the Rosario grains exchange said.

About 80 percent of Argentina's farm exports are shipped from terminals that line the Parana River at Rosario, offering quick access to the shipping lanes of the South Atlantic.

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