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10 Years Later: The Farming Sector Conflict that Sparked Argentina’s Current Divide

By | [email protected] | July 17, 2018 6:12pm

125Photo via Panama Revista
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Ten years ago today, Argentina lived one of its most politically relevant moments of the century: Vice President Julio Cobos mumbled his now famous line: “Mi voto no es positivo” (“my vote is not positive”) and struck down a bill aimed at increasing taxes on soy products and sunflower exports.

When described like that, it could be difficult to understand why the event wasn’t circumscribed to the farming sector, affected by the bill. But its wide-ranging effects, which transcended those directly involved, and the underlying political battle exposed in the measure, resulted in the conception of a political division that has grown exponentially throughout the years and given the country the unfortunate title of – according to this poll by Ipsos – being the second out of 27 countries with the lowest tolerance to dissent, with 92 percent of Argentines surveyed claiming this is the case.

So, given it’s been a decade since the voting session that shaped the Argentine political landscape for at least another ten years, let’s look back at the origin of the conflict and the way it unfolded until its exhilarating final, as well as the drastic change of approach taken by the Macri administration in its first years in office and why, in an almost prophetic coincidence, this tax went back to being present in the political conversation in the past weeks.

The conflict with the farming sector began on March 11, 2008, when then-Economy Minister – and now staunch detractor – of the Cristina Fernández de Kirchner administration, Martín Lousteau, announced that the government would sign a decree implementing a new system of mobile taxes on soybean products and sunflower exports. The tax would have initially increased from 35 to 44 percent.

The largest producers of the sector rose in arms (or tractors) against the measure, calling it “confiscatory” and arguing it was implemented as a result of the high prices the crop was enjoying on the international markets. Let’s recall that commodity prices soared during the second half of the aughts, but now its prices have lowered to almost half. Immediately after the announcement, the producers called a 48-hour-long strike to protest and did not commercialize grain or meat in all the country.

Photo via Ritmo Paraná

 

As weeks went by, the conflict did nothing but escalate. Government officials, but especially then-president Kirchner, came out to criticize the producers with different lines that went down in history: “roadblocks of abundance,” and “soy is practically, in scientific terms, a weed,” diminishing its importance, are some of them.

The clashes were also present on the streets. Detractors of the measure conducted typical cacerolazos (a way of protesting that was born during the 2001 crisis, which consists in banging pots and pans on the street to show discontent) to protest the government’s actions; and its supporters rejected them with marches of their own, arguing they were protests conducted by “sectors of the oligarchy.”

One of the most emblematic moments of the conflict took place on March 25, when then-picketer leader and government associate Luis D’Elía conducted a so-called “counter-march” at the same time a cacerolazo was taking place, and ended up attacking a protester from the opposite camp who was questioning him.

 

Tensions kept escalating between the camps, but also within the government itself, due to opposing criteria regarding the best way to handle the conflict. This dissent was illustrated by the historic gesture that then-Trade Secretary Guillermo Moreno made to Lousteau in an official event. Amid a heated discussion, Moreno, in front of the press and the public, made a gesture as if he were slitting a throat. Lousteau resigned less than a month later.

Years later, Lousteau, already a member of the opposition, told the story behind the episode: “Moreno forced the President make an extremely bad decision in another area. I had been trying to convince her otherwise. The President refused, and I went on to question Moreno, who told me to stop. Moreno was canceling meat shipments that were supposed to go to their destination. It was crazy. But Moreno told me ‘you don’t understand anything, we are drawing a line here,’ and made that gesture,” he said.

 

 

The conflict marked the definitive break between the Kirchner administration and the Clarín media empire. After having gradually fallen out with the Kirchners the year before, Clarín strongly supported the agricultural sector and revealed as much through its various media outlets, so much so that Cristina accused it of compromising freedom of speech by only publishing what she saw as bias. She essentially accused the corporation of robbing “ordinary citizens’” freedom of speech. “It seems like there is a prohibition from somewhere in the country to inform that good things happen in Argentina,” said Kirchner during an event.

Tensions continued to escalate, with more marches, strikes, and even leaders of the farming sector arrested during the protests. In an attempt to put an end to the situation, the President decided to turn the decree into a bill and sent it to Congress.

After being passed in the Lower House with 129 votes in favor and 122 against, the initiative made it to the Senate, where the voting played out in the most dramatic way possible. After a 36-36 stalemate, Vice President Julio Cobos, member of the Partido Radical (UCR), had to intervene and break the tie.

Visibly nervous, Cobos said “History will judge me, I don’t know how, but I hope this will be understood.” “My vote is not positive,” he said, thus striking down the bill, to the joy of the tens of thousands of farming sector supporters who were following the Senate’s session live on a big screen in Palermo.

 

 

Remembering that moment in a TV interview yesterday, Cobos recalled his conversation with Cristina Kirchner after the vote: “I saw she was not well. I asked if we could talk alone, but she was with [Florencio] Randazzo and [Sergio] Massa. I gave her my point of view and said ‘look, I know I have to ask before doing things, but not everything. This is supposed to be a government that aims at reaching consensus, and I tried to contribute by solving an unnecessary conflict.’ She answered: ‘No, this is broken. From now on we will only have an institutional relationship.'”

President Mauricio Macri, in contrast with the Kirchner administration, took a completely different approach in its relationship with the farming sector. A few days after taking office, he fulfilled one of his main campaign promises and announced the government would eliminate all export taxes on grains (such as wheat and corn) and meats (including fish), while export taxes on soybeans, Argentina’s staple, would be reduced by five percent annually.

The government has kept its promise so far. However, as mentioned before, the certainty of its continuing to reduce the taxes on soybean products is not complete. As a result of the economic turbulence the country is enduring, the possibility of suspending the reduction has been brought up in and outside the government. In a document prepared before approving a US $50 billion deal with Argentina, the International Monetary Fund advised the Macri administration should keep soy product export taxes at an average of 25.5 percent.

When the rumors were circumscribed to the government, President Mauricio Macri rejected to make that decision. However, he has not spoken publicly about the possibility ever since the IMF made the recommendation. Representatives of the farming sector, on their end, are preemptively urging Macri to honor his commitments.

What decision the administration makes is yet to be seen. The government knows the farming sector has firepower, but also that the situation is different now, as a large part of the sector’s then-supporters are also ideologically aligned with the administration. Moreover, the current Agro-Industry Minister, Luis Etchevehere, was the head of one of the four entities at the forefront of the 2008 conflict. So even if the government decides to follow the IMF’s advice, the chances of repeating another 2008 are slim.