Argentina's farm dispute
Cristina's climbdown

Jun 19th 2008 | BUENOS AIRES
From The Economist print edition

Calling Congress back to life

STRONG presidents have been common in Argentina. But even judged by local practice, Néstor Kirchner concentrated power during his term from 2003 to 2007. He governed largely by decree, all but ignoring Congress, where a pliant majority granted him “superpowers” to reassign budget allocations freely. His wife and political partner, Cristina Fernández, who succeeded him as president last year, began just as imperiously. But unable to bully striking farmers into submission, she has turned to Congress for support.

Ms Fernández's problems began in March when she decreed a sliding scale of tax rates on Argentina's farm exports. The tax on soyabeans rose to 40% from 27% under Mr Kirchner. It would reach a marginal rate of 95% if the price of a tonne of soyabeans were to rise from $571 (its level on June 18th) to $600. With inflation already eroding their profits, farmers' patience snapped. They staged protests across the country and halted grain sales.

Mr Kirchner had faced down several foreign interests he saw as foes, such as holders of Argentina's defaulted bonds and the IMF. He urged his wife, both privately and publicly, to take a similarly hard line with the farmers. But her officials' efforts to paint the protesters as a rural oligarchy bent on toppling the government have done her little good. Mr Kirchner was fortunate in benefiting from a robust economic recovery that began before he took office. Now Argentines are fed up with the inflation and energy shortages bequeathed by his expansionary policies. The farmers have their sympathy.

The farmers have not been swayed by government offers of rebates for small-scale producers or by a lowering of the top tax rate. On June 14th, with a new round of protests under way, the police used force to break up a roadblock, arresting a popular farmers' leader. This was selective law-enforcement: for years the government has refused to deploy the police against a similarly illegal roadblock by its own supporters only a few miles away in protest at a pulp mill in neighbouring Uruguay.

Two days later, demonstrators thronged many Argentine cities, banging pots and pans in exasperation. Ms Fernández responded by sending a bill to Congress re-iterating the new taxes. Her Peronist party holds comfortable majorities in both houses. But she cannot be assured of its approval. Although opposition parties remain weak, resistance to the Kirchners is stirring within Peronism.

By throwing the issue into Congress's lap, Ms Fernández may have achieved an elegant climbdown. But that cannot disguise a crushing political defeat. The most recent opinion polls give her an approval rating of just 20%, down from 54% in February. Her husband's popularity is plummeting fast too.

The Kirchners have tried to rally their supporters by claiming that Argentine democracy is threatened. That is one way of looking at it. Another is that the farmers and their supporters—and now the Congress—are breathing life into democracy after several years of near-autocracy.

Etiquetas: política

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