Argentine farmers are preparing to fight the government as they plan a nine-day strike, starting on Thursday, to stage protests against a month-long suspension of imported animals aimed at reducing prices.
Cattle prices in the country have doubled in the past year, adding to prices rising from 46 percent a year. Officials are concerned that domestic consumption as a result of rising prices for one of the world’s largest exporter of cattle could damage the government’s reputation ahead of the by-elections later this year.
The ban on export was first announced on Monday although it should not be enforced. The aim is to increase domestic availability to reduce local prices, and price increases within 17 months of Leadership of Alberto Fernández higher than any other President at the same time since the last crisis of power outages in Argentina in 1989.
Farmers say it’s high cattle prices are rising, not only locally – especially for transportation – but also because of the growing global market for crops that feed their cattle. But a ban on exports has forced the government to pay much-needed foreign exchange from a share that made $ 3.4bn in exports last year, while large central bank reserves run out of almost zero.
“They are shooting themselves,” said one leading exporter, who fears that large customers in China and Europe could look elsewhere to find reliable suppliers, such as competitors in Uruguay, Paraguay or Brazil – especially if the option is extended, as they fear. “Recovering markets after this crisis is very difficult, and will mean selling at a lower price.”
Argentine cattle that are exported are different from those sold locally, because they come from large animals that are fat and grain, so they are cheaper to produce. The product must be sold at a lower price in the local market, say the manufacturers.
Some fear a recurrence of agricultural threats in 2008, sparked by the same ideology set up by former President Cristina Fernández de Kirchner, who now serves as Vice to vice president of Argentina. Exports fell by almost half and international livestock was reduced by 20%. Many animal carriers were affected and 12,000 employees were fired from their jobs. Although some businesses are still open, it is still heavily in debt.
“The problem is, you are lowering prices in a short period of time – this is happening – but at a much higher cost in terms of manufacturing, employment and exports. And there will be higher prices on the road, “said Marcos Buscaglia, a local economist, pointing out that prices would rise again if, or if, Argentine livestock were met.
Kezia McKeague, director at McLarty Associates’ Advisor, says this could damage Argentina’s reputation and its export potential. Meanwhile, monetary policy, import restrictions and price cuts are making business in some areas unstable, forcing some companies to leave the country.
“While rising prices are frustrating for ordinary citizens, the idea of giving the most important exports to Argentina is more about short-term goals in a mid-term election than any other economic perspective,” he said. Despite the “unpredictable popularity” of Argentina’s financial system, governments on all political sides emphasized the need to boost export power, which remains low compared to domestic currency, he added.
Sales are about half of all exports, with cattle about 5%, recovering well from the end of Fernández de Kirchner’s 2015 presidency. the same, weakened, falling below the annual average of 50kg after climbing about 60kg in 2009.
Many farmers had already been outraged by the Fernandez regime, which had pushed their borders to extremes by raising export taxes and forcing them to change their earnings with foreign currency at a lower cost.
Such dissatisfaction has led to concerns about future restitution in 2008 by farmers, which led to Fernandez’s resignation as prime minister at the time. “The government is repeating the same big mistake it made 13 years ago and the consequences will be worse or worse,” said the cattle dealer.