Argentinean economy threatened by farm strike

Argentina is the world’s second-largest corn exporter and the third-biggest soybean supplier.

Although, as a result of the second farmers strike in two months, government officials and the farm leaders are at loggerheads.

Cabinet Chief Alberto Fernandez is currently leading the talks wit the farmers in order to prevent the strike although the discussions broke down due to farm leaders being unwilling in finding a workable resolution.

The farmers are rallying for changes in a new sliding-scale tax system that places export taxes to international prices.

The protesters have threatened to block grain sales for eight days after talks over a new variable export tax collapsed on Wednesday.

This was initially imposed by President Cristina Fernandez in March as the levies have been placed on some of the country’s strongest exports, namely soya beans, which has meant that prices will increase from the fixed rate of 35 percent to 40.

The government has defended the move as away to redistribute wealth and contain inflation whilst also increasing government revenue from farm exports, which has growing substantially in recent months especially with the increasing demand form emerging markets such as India and China.

Analysts predict that the dispute may shave 1 percentage point off economic growth in Argentina.

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