Argentina farm strike flares again after crackdown

BUENOS AIRES (Reuters) - A three-month standoff between Argentina's government and farmers over a tax hike turned violent on Saturday when military police in riot gear used batons to try to clear roadblocks on a main highway.

Farmers began their fourth strike in three months to repudiate the government crackdown. The protest began at midnight and will run through Wednesday, with farmers halting sales of grains and most agricultural products.

"Today was incredible. After what happened in Gualeguaychu, the situation exploded and thousands of farmers mobilized," said Eduardo Buzzi, head of the Argentine Agrarian Federation, one of the four farm groups leading protests.

Military police dragged demonstrators off Route 14 near Gualeguaychu, in Entre Rios province, to allow trucks carrying food and other goods to pass amid growing shortages, television images showed. Hundreds of townspeople rallied around the farmers and forced the police to retreat.

Police also briefly detained a leading figure of the agrarian federation, sparking more road blocks by farmers.

The conflict has posed a major challenge to the center-left government of President Cristina Fernandez, who succeeded her husband in office six months ago. The strikes have undermined her approval ratings, despite an ongoing economic boom.

The dispute first flared in mid-March, when the government raised export taxes on the country's top crop, soybeans.

Farmers protested against the measure, virtually paralyzing the grains trade and prompting out-of-work truckers to block highways this week to demand the dispute be settled.

SOCIETY DIVIDED

Hundreds of anti-government protesters in Buenos Aires took to the streets in small groups to bang on pots, in demonstrations reminiscent of the country's political and economic meltdown in 2001.

Others protested outside the presidential residence in a wealthy suburb, where scuffles broke out with government supporters.

In the evening, several thousand leftist activists rallied in the government's defense at the Plaza de Mayo square. Former President Nestor Kirchner, Fernandez's husband, joined the crowd along with several cabinet ministers. Kirchner embraced supporters lining his path.

Cabinet Chief Alberto Fernandez told a news conference the government is willing to negotiate with the farmers but only if they stop setting conditions and staging strikes.

"This has been a difficult day for everyone," he said.

Interior Minister Florencio Randazzo defended the government's efforts to clear roadblocks.

"The police didn't have weapons or tear gas, they simply wanted to move (protesters) off the highway and they resisted. In fact, there was much more violence on the part of farmers than on the part of the police," Randazzo told local television.

The farm conflict began when the government imposed a sliding-scale system on grains export taxes that effectively capped farmers' profits and raised levies on soy and sunflower seed products.

Although officials tweaked the tax scheme, farmers said it wasn't enough and they have continued to demand that the government engage in talks.

Saturday's roadblocks worsened food and fuel shortages that have hit smaller cities in Argentina's heartland the hardest.

Enrique Salvador, president of a federation of small grocery stores in Buenos Aires, told local media that supplies of food staples like rice, dairy products and flour have shrunk by about 35 percent.

Fernandez defends the high export taxes as a way to tame food inflation and redistribute wealth, in a country where nearly one-quarter of the population is poor.