Global Processing

Argentine lawmakers back grain-export taxes

July 7, 2008
The Associated Press is reporting that Argentina''s lower house of Congress recently approved a package of grain-export taxes that sparked nationwide farm protests and food shortages.

The 129-122 vote followed 18 hours of heated floor debate during which supporters offered measures to simplify collection of the taxes and to help small producers, while opponents argued for canceling the taxes.

At least 125 votes were needed to pass the measure, which the Senate is scheduled to debate in the coming days.

President Cristina Fernandez implemented a more than 10 percent increase in the taxes on March 11, sparking months of on-and-off protests by major farm groups who blocked highways and caused nationwide food shortages. Even government supporters protested, urging Fernandez to negotiate an end to the crisis. The president''s popularity plummeted.

Fernandez sent the tax package to Congress two weeks ago in an effort to diffuse the crisis, but critics derided the action as pure theater: Fernandez''s party holds a majority in both houses.

Yet during the protracted debate, some members of Fernandez''s Peronist party and the allied Front for Victory party openly opposed the tax increases, revealing fissures in a traditionally solid political front.

Fernandez has refused to roll back the taxes, saying they are needed to share soaring farm profits with Argentina''s 10 million poor.

Farmers contend the higher taxes make it hard for them to make a living and that they need to reinvest profits to increase production to meet rising demand.