The government of Cristina Fernandez de Kirchner, during the week met with the leaders of four entities of the agricultural sector, the ruralistas, to analyse, and discuss the implementation of a revised taxation package, which the government announced during the rural lockout.
The rural lockout lasted for 21 days, and began after the government introduced tax increases – from 35% to 45%, in most cases - on agricultural exports, such as wheat, soybeans, and beef.
The proposed package will rollback the tax increases, with compensation, for the small-to-middle agricultural producer.
At the time of writing, negotiations have stalled after the four entities denounced the Agricultural minister’s dialogue as “to apply pressure and threats” reported Clarin on April 16.
Agro-economy
The economic policies of Kirchnerismo, and previous administrations, has seen large subsidies for the agricultural sector. Subsequently, this has conduced a concentration of capital in the production of primary commodities – soybeans in particular since the 90’s, which now accounts for 22% of the GDP.
The powerful landowning bourgeoisie, and the foreign transnationals that benefit from the agro-production, have reaped super-profits from the rising prices of agricultral commodities.
On March 28, Clarin reported: “It was in the first quarter, when there was a registered rise of 30% of prices in the products that Argentina sells to the world. The products from the countryside represent 61% of the total exports.” Since last year the price of soybeans has risen by 70%.
With the dependence of the Argentine economy on agriculture, the grand agricultural producers continue to concentrate their power. “There is 2.2% who own 46% of production”, Pagina/12 reported on April 1. Meanwhile, the small-producer makes up for 80% of rural population, but only genearates “20% of the soy beans in Argentina.” There are more than 300,000 workers in the agricultural industry, with a miserable, average monthly-wage of 1200 pesos, $379 US.
The fiscal measures introduced – claims the government - is an attempt to keep basic food prices low for Argentines - by encouraging production towards the internal market and away from exportation; to stimulate economic development in other sectors; to restrain the “soyaisation” of the countryside, and encourage the farming of other crops; as a mechanism to mitigate the impact of the international financial crisis; and, above all, to redistribute the country’s wealth.
However, the economic model that Kirchnerismo proposes ensures that the agro-oligarchy has a dominant position in the economy. The inflation of primary commodities is, rather, a direct result of the economic policies that Kirchnerismo maintains. The fiscal measures are rather an attempt to redirect money to pay off Argentina’s existing foreign debt to the IMF.
Reactionary response
The generalisation of the taxation increase - an ineptitude of the Kirchner government – to apply to the entire agricultural sector, without differentiating between scale, sectors, or regions of the producers, facilitated the rightwing to unite all four agricultural entities under the political and economic program of the landowning bourgeoisie.
Sections of the bourgeoisie, united by the rural entities, mobilised the media, opposition, and middle-class, and used the rural strike to try to weaken the government.
The majority of those people blockading the roads were the small-to-middle producer, under the leadership of the landowning bourgeoisie. In the cities the cacerolazos - protests involving pot banging, made common during the 2001 uprising in the midst of the country’s economic crisis - comprised the upper-middle class, in solidarity with the ruralistas, who vehemently protested iniatially; but protests began to fade once food shortages become palpable.
The mass-media, notably the newspaper Clarin, was complicit in garnishing public discontent. Televisions streamed pictures of the blockages, ruralista speeches, and showed trucks dumping spoiled produce on the side of the roads - by the end of March, local supermarkets were out of meat.
Kirchnerismo responds
While initially unwilling to budge on the tax increase, the Kirchner administration eventually compromised. The revised tax increase would see a differentiation between producers, and would rollback the taxes on the small-to-middle producer, with compensation.
However, the Agrarian Federation, who represents the small-to-middle producer, and has the most members, followed the lead of the other entities, rejecting the government’s offer, almost immediately after its announcement, as “inadequate”. Instead, they declared that the lockout would continue until April 2.
Kirchnerismo mobilised 100,000 people for Tuesday, April 1, in a show of force. It waged a demagogic campaign drawing comparisons with events that led up to the 1976 military coup. On the day, president Cristina Fernandez de Kircher, spoke of “the defence of the national and popular government”, making references to Evita Peron, and Las Madres de la Plaza de Mayo – the Mothers who had family members disappeared during the dictatorship.
The following day, the lockout was suspended for 30 days. The government and rural entities are still in dialogue.
The Argentine Left
The confrontation between the government and the ruralistas, evoked numerous responses, and tactical differences, albeit fragmentations, from the left.
Firstly, there were those small layers, such as the debilitated Communist Party, and other pseudo-left organisations with government positions, that defended Kirchnerismo unconditionally, and mobilised for the rally.
However, one left block analysed the situation as a battle in between two wings of the bourgeoisie – “capitalism vs. capitalism” – argueing it was necessary to have an independant strategy, and not march behind the oligarchy.
The Workers’ Party (PO) stated on their website: “we made an action with a program independent from the capitalist blocks in struggle.” These left forces rallied behind the slogan “Not the countryside, Not the government.” The statement elaborates: “it’s necessary to face a systemic crisis, not the rate of a tax.”
Other left forces rallied behind the slogan “against Cristina, and against the oligarchy. Support for the small producer!” This layer argued that it was necessary to win over the middle-class, small-producer. It campaigned for the rollback of the tax increases, and criticised the government for not assisting the small- producer.
Vilma Ripoll, leader of the Socialist Workers Movement-New Left (MST), in a press-release published on April 9 by Pagina/12, commented: “Unfortunately, one sector who distances itself from the left, supported the government against the claims of the small-producers…others, sectarianly, rejected a policy of alliances of the workers and the middle-class sectors of the countryside and the city, indispensable for a left project that aims to be an alternative.”
Ripoll concluded: “After all, this crisis has demonstrated that the stage that opened Argentina since [the] 2001 [economic collapse] is not closed. Cristina has confirmed this reality, which for her and her government left a sour taste.”
