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Rallies split Argentina before tax vote

posted on July 18, 2008

By JEANNETTE NEUMANN, Associated Press Writer Tue Jul 15, 7:53 PM ET

BUENOS AIRES, Argentina - Tens of thousands of Argentine farmers and government supporters staged dueling protests Tuesday ahead of a Senate vote on a package of grain-export taxes that generated months of bitter farm strikes.

The strikes and road blockades by farmers led to food shortages, cut grain exports and have eroded President Cristina Fernandez's popularity. In a bid to ease the standoff, Fernandez, who decreed the tax hikes in March, last month agreed to put them to votes in congress.

The lower house approved the export-tax hikes earlier this month and the Senate votes on them on Wednesday. Fernandez's allies control both houses and farm group have threatened to take the tax package to the courts even if the measure is approved.

Farm leaders on Tuesday urged lawmakers to vote against the tax increases, which they say will cripple rural economies. Tax revenue will remain in the central government's coffers and won't go to the provinces where corn, soy and other grains are grown, they complained.

"We are here to give our support to those senators who are willing to help their country," said Mario Llambias, head of the Argentine Rural Confederation. "The government can't keep robbing the provinces."

Local media reported that 225,000 people attended the farmers' rally and about 95,000 people were at the pro-government demonstration. Such figures are often exaggerated and could not be independently confirmed.

Fernandez's husband and predecessor Nestor Kirchner was the keynote speaker at the pro-government rally.

"We will accept the Congress' decision whatever it may be because we want social peace," said Kirchner, who finished his speech minutes before the farmers' rally started several miles (kilometers) away near a swath of city parks.

Kirchner called farm leaders "destabilizers," comparing their protests to the 1976 coup that led to an eight-year military dictatorship.

Fernandez decreed a more than 10-percent, sliding-scale increase in export taxes on soy and other grains on March 11, arguing that Argentina's farmers should share their profits from booming world food prices with the nation's poor.

Farmers — who say they need to reinvest their profits in their farms — launched months of protests, suspending sales and blocking highways.

Argentina is the world's third-largest exporter of soy and wheat and the second-biggest exporter of corn.

The president's popularity has fallen to 20 percent, according to a June 2-10 poll of 1,000 Argentines by the consultancy Poliarquia, which attributes the drop to Fernandez's handling of the farm crisis. The survey has an error margin of plus or minus 3.5 percentage points.

Fernandez, who was not present at Tuesday's demonstration, has stood by the increase in export taxes.

Tags: agriculture Argentina news protests South America voters