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UPDATE 1-Argentine farmers call strike as tax bill advances
May 31, 2012 / 9:45 PM / 5 years ago

UPDATE 1-Argentine farmers call strike as tax bill advances

* Lawmakers in top grains province set to approve tax reform

* Farmers say will halt grain, cattle sales

* Soybean, corn growers say tax hike will erode profits

By Helen Popper

BUENOS AIRES, May 31 (Reuters) - Growers in Argentina’s biggest farming province will halt sales of grain and livestock for nine days to protest a tax-hike bill advancing in the provincial Congress, agricultural groups said on Thursday.

Cash-strapped Buenos Aires province is the country’s top producer of soybeans, corn and wheat, and the protest could affect grain shipments, though the level of disruption would depend on exporters’ stocks.

Farmers said they would go on strike moments after lawmakers passed the local government’s proposal to raise taxes on some land holdings. That passage would clear the way for the bill to be debated by the Senate. Senators were expected to give it final approval later on Thursday.

“Today is an unfortunate day that’s ended with the start of the strike measure that we’d sought to avoid to the very last,” Hugo Biolcati, president of the Argentine Rural Society (SRA), told reporters outside the provincial Congress in the central city of La Plata.

The SRA was one of four main farming groups that led months of anti-government tax protests in 2008, shaking financial markets and driving global prices higher.

Dozens of flag-waving farmers gathered to protest the planned tax increase, which Governor Daniel Scioli says is long overdue and will not hurt most growers.

Scioli, seen on Wall Street as a possible market-friendly successor to President Cristina Fernandez in 2015, said rural land valuations have not been adjusted since 1955.

Strong global demand for Argentina’s grains and biodiesel shipments has pumped up the price of farmland in recent years.

“Those farmers who suffered drought and flooding won’t have to pay” the extra taxes, which “will only affect 38 percent of rural properties,” Scioli’s cabinet chief Alberto Perez told local television.

Scioli wants to reduce his province’s fiscal deficit as the 2015 presidential election draws nearer. He has said he wants to run for president if Fernandez’s allies do not try to change the constitution to allow her to seek a third term.

Analysts cite his need to bolster provincial coffers as a way of gaining independence from Fernandez.

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