Wednesday, April 17, 2024

ECONOMY | 16-01-2021 08:31

Export cap reversal rounds off chaotic week of agro tensions

Government responds to three-day strike action with concessions to agricultural producers, removing corn-export block, then cap, before finally agreeing to ‘monitor supplies’ jointly.

A week of agricultural tensions for the government ended in another dramatic U-turn this week, with producers and officials agreeing to further dialogue as a result.

Agricultural producers began a three-day strike on Monday in rejection of the government’s decision earlier this month to suspend maize exports until March 1. 

The so-called 'paro agrario' went ahead despite a last-minute intervention from the government, which lifted the block and replaced it with a daily sales cap of 30,000 tones on corn exports as the strike got underway. 

The decision, confirmed by the Agriculture, Fisheries & Livestock Ministry and issued on Sunday at midnight, failed to move farmers. The Mesa de Enlace roundtable that brings together the biggest groups representing farmers said that the move was insufficient, despite a less than united front, with only three of four confederations adhering to the block on sales.

"The measure of force continues. What the government resolved is what we asked for, but not with a limit of 30,000 tons per day," Carlos Achetoni, the president of the Federación Agraria (Agrarian Federation), one of the three groups that backed the strike measures, said Monday.

And so the strike continued, as did talks with the government, which were mediated by the multi-sectoral Consejo Agroindustrial Argentino (Argentine Agroindustrial Council, CAA), formed by 57 organisations including those who work in industrial, marketing and export sectors, as well as agricultural producers.

Finally, on Tuesday, the Agriculture Ministry issued another statement, confirming that all restrictions had been lifted. The reversal was agreed during talks with producers’ groups, which lifted the strike after both sides agreeing to set up a monitoring system to ensure supplies are sufficient to meet domestic and overseas demand.

"It is a priority for the national government to decouple domestic prices from the dynamics of international prices, while we can continue to strengthen the development of the sector and exports," said Agriculture, Fisheries & Livestock Minister Luis Basterra.

Government officials, however, briefed that the U-turn was not a result of the strike action but a product of talks with the CAA.

Producers welcomed the climbdown. "The government backed down with the decision to intervene in the corn market and this caused us to lift the strike," said Jorge Chemes, the president of Confederaciones Rurales Argentinas (Argentine Rural Confederations, CRA), disputing the Casa Rosada’s chain of events.

“The government backed down,” agreed Daniel Pelegrina, the president of the Sociedad Rural Argentina (Rural Society).

Chemes said the leaders of the Mesa de Enlace would request a meeting with President Alberto Fernández to discuss improving production and development.

Argentina is the world’s third-biggest maize exporter after the United States and Brazil, with its 2018-2019 harvest reaching a record 51.5 million tons in sales abroad. In the framework of a prolonged recession aggravated by the coronavirus pandemic, the country depends on its farm exports to obtain hard currency.

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