Argentine government says farm talks "fruitful"

Reuters: [2008-05-23 03:08:00]

BUENOS AIRES, May 22 (Reuters) - A meeting with Argentine farm leaders to try to end a three-month conflict over soy export taxes was "fruitful," a top government official told reporters on Thursday.

But leaders of the country's main four farm groups did not immediately comment on the 90-minute meeting.

Farm protests over higher taxes on soy exports paralyzed Argentina's grain exports in March and part of May, and created a political crisis as the country debates how to distribute windfall profit from soy at a time of high world prices.

Argentina is a major exporter of soy, corn, wheat and beef, and agricultural profit has soared at a time of high prices for commodities both for food and for biofuels.

Government-farm sector talks will continue next week and will focus on farmer complaints that the new soy export tax creates uncertainty on grains futures markets, said Cabinet Chief Alberto Fernandez and Economy Minister Carlos Fernandez.

Cabinet Chief Alberto Fernandez said the government has accepted farmers' demands to discuss the new soy tax, and he said talks next week will focus on the functioning of futures markets and that technical groups will be formed.

"We will work to find a solution," the cabinet chief said in a news conference, where he did not take questions.

Farmers have demanded the government completely suspend the new sliding-scale soy export tax, but Alberto Fernandez reiterated the government's previous offer of tax rebates for small producers and of transportation subsidies for soy growers far from ports.

He said those measures would compensate 80 percent of growers for the new tax.

Fernandez said it was strange that a very small number of producers had asked for the rebates and the subsidies so far. He said that may be because a lot of small producers are not properly registered businesses.

Farmers have complained that the government has held up beef exports since the March farm strike, by asking for more than the usual paperwork at customs.

Beef exports are getting back to normal, Cabinet Chief Fernandez said, but he added that the government is rejecting export petitions from companies that are not following rules regarding supplying the domestic market with certain beef cuts and government-set maximum prices.

Farmers have also complained that the government has refused to reopen wheat export registries, which have been shut for months.

Fernandez said that the "wheat issue is very hard to resolve." He said the government does not want to allow wheat exports until it is completely sure that 6 million tonnes of the 16 million tonne crop will stay in the country.

The cabinet chief said 1 million tonnes of wheat is still missing and said that had to do with the informal way the agricultural sector works.

"We all agree the excess should be allowed to be exported, but we don't want to allow tax evasion," he said.

"The sector operates with a high degree of informality and that must be corrected," he said. (Reporting by Fiona Ortiz; Editing by Gary Hill) ((E-mail: buenosaires.newsroom@reuters.com; +54 11 4318-0618; Reuters Messaging: fiona.ortiz.reuters.com@reuters.net))