Changing the Subject

(#3 in My Ongoing Attempt to Understand Argentina's Latest Meltdown)

On March 11, Martin Lousteau (then Argentina's Economy Minister) announced that the tax on the export of soy would be increased to about 44%, with that percentage being indexed to the price on the international market. As that price went up, so too would the tax. Taxes on exports, or "retenciones", were first applied (at a level of 20%) in 2002 by then President Eduardo Duhalde. The agricultural sector ("El Campo") had gone along - likewise when the rentenciones went up to 25%, and then 35%. But 44% was seen as confiscatory. The fact that it was announced in the middle of the harvest, without consulting the agro sector, and decreed ex cathedra only aggravated the situation.

After that announcement, the farmers (driving tractors and pickup trucks) took to the streets in hopes of getting the President's attention. Highways were closed to any trucks transporting agricultural goods - whether soy or wheat on their way to the port, or beef and dairy on their way to the Central Market in Liniers (just outside Buenos Aires). There were food shortages. In a country with a population of 40 million and argicultural capacity to feed almost ten times that number, supermarkets had to resort to placing limits on the amount of milk or flour one could buy. For about a week, beef - the cheap availability of which is the birthright of every Argentine - was nowhere to be had in Buenos Aires. As one local blogger succinctly put it, "Argentina without beef. Not good."

Perhaps calculating the shortages would turn public opinion against the farmers, in the late-afternoon of March 25 President Fernandez de Kirchner directly addressed the situation in a widely-anticipated speech. Many hoped that she would choose this moment to make good on indications she had given during her campaign that she would leave behind the heavy-handed, take-no-prisoners style of her predecessor (husband Nestor Kirchner) and adopt a more conciliatory, magnanimous tone. Instead, the farmers got a petulant, finger wagging dress-down, in which she accussed them of being motivated by nothing other than greed. In other words, instead of sitting down and talking with the representatives of what is arguably the economic engine of the country, she gave them a spanking.

The response to the speech was immediate, not only among the farmers and the vast numbers of people in the interior who depend upon them economically, but among many residents of Buenos Aires. By 8 pm that same evening, while a fair amount of porteños (as the residents of BA call themselves) was banging pots and pans, either out on their balconies or in the streets, more tractors and farm machinery were deployed to highways throughout the country. Later, a few thousand people - mostly middle and upper-middle class - converged on the Plaza de Mayo, the political epicenter of the country, in a peaceful demonstration in support of the farmers.

Being a citizen of a country which seems largely to have lost the will to take to the streets in the face of the many recent outrages committed by its rulers, my first reaction to the pot-banging and the protest in the Plaza de Mayo was one of admiration. Agree with them or not (and what the hell do I know about agricultural policy anyway?), what's not to like about a group of citizens peacefully manifesting its displeasure with the policies of its government? We could use a little of this spirit in Washington DC right now.

As the protest was winding down, a group of counter-demonstrators entered the Plaza. Again, nothing wrong with this - except for the fact that some of them were wielding yard-long lengths of wood. Their banners announced their intentions. "La Plaza es de las Abuelas y del Pueblo" ("the plaza belongs to the grandmothers [of the Disappeared] and to the people"). Another read, "Ahí Estan los que Apoyaron el Gobierno Militar" ("These are the ones who supported the military government"). With the police suspiciously absent, the second crowd made quick work of the first, which had no stomach for a brawl. It dispersed into the side-streets, though some (incuding at least one prominent journalist and one Diputado Nacional) did not get out unscathed. By midnight, the Plaza had been restored to its rightful owners and the real meaning of the crisis had been laid bare: the farmers, along with their urban middle-class supporters, are just a bunch of unreconstructed, dictatorship-sympathising running dogs of neoliberalism bent on overthrowing the government and handing over the country to the tender mercies of international capitalism. Right then, now that we've got that all cleared up....

Anclao en B'Aires

The fires went on burning for a couple of weeks. Strangely, the task of putting them out seemed not to be very high on anyone's agenda. Instead, they were deployed by the goverment as evidence of Agro's malevolence and greediness. According to this view, the farmers set the fires intentionally, as part of their disagreement with President Cristina Fernandez de Kirchner, who (along with the majority of the country's population) currently lives downwind. Agro's uncanny ability to enlist the cooperation of the sun and the wind was taken by the government and its supporters as further proof of "powerful interests" pulling the strings, no doubt from somewhere up north. Finally it rained, putting the fires out and fueling hopeful speculation about a rift (una interna) between the elements.

The smoke may have disappeared, but almost three months after the now-ex Minister of the Economy started all of this by announcing yet another tax increase on exports of soy, this crisis shows every sign of just gathering steam. What began as what in any other country would've been an easily-resolved dispute over agricultural policy has turned into a full-blown national donnybrook. As the smoke managed to penetrate everywhere, so has this latest example of Argentina's astounding talent for snatching defeat from the jaws of victory.

Argentina, one of the world's top-three soy producers has ceased exports precisely at the moment of greatest international demand. Ships that should've long since unloaded in Shanghai are still anchored in B'Aires or Rosario or Bahia Blanca, meters running. This week, truckers in the thousands began parking their rigs on major highways to protest the fact that the farmers in the hundreds of thousands have been parking their tractors alongside major highways, intercepting any trucks carrying grain for export. The new President, insecure, paranoid, and pig-headed, would rather watch the country go up in flames than run the risk of being seen as having given in to the farmers, who are equally intransigent. Problem is, while their approval ratings have gone up, hers have plummeted, right alongside the country's bond ratings. Inflation is way up. Whatever (relatively minor) gains that might've been gotten from those nine percentage points have long since been erased. Meanwhile, throughout the country, link after link in the economic chain is being snapped. The whole thing is just stunning. How did it come to this? How is it possible that Argentina looks about to tear itself apart again?

Burning Fields

The smoke has cleared, for the time being, although one night about three weeks ago the entire slumbering population of Buenos Aires collectively awoke, put on its slippers, and ran to the kitchen in search of the fire. Finding nothing, those who could went back to sleep. The rest of us made coffee and waited for the sun to come up.

For the lucky few with river views, it might've been worth the wait, rising as it did a stout blood-orange over Uruguay and the Rio de la Plata. For everyone else, daylight was just backlight diffused through the thick, acrid smoke that during the night had crossed the General Paz and advanced (block-by-block, neighborhood-by-neighborhood) until it was everywhere. Windows were sealed as best they could be. There was a run on surgical masks. Anyone with access to a house sufficiently south went there. Then, with just enough wind to carry it but not enough to carry it away, the smoke reached there as well. And there it stayed for a few days, irritating eyes and throats and lungs, causing a number of catastrophic pile-ups (after which several major highways were closed), and sending everyone - or their domestic employees - scurrying out to gather the laundry.

As it turns out, the fire was (and still is) about 100 kilometers to the north, up in the province of Entre Rios (or, "between rivers"), where 60,000 hectares of grassland have been burning out of control in the Paraná Delta. Apparently it had been burning for quite a while. Some of the locals had been complaining about it to any government official who would listen. Few did, until the wind shifted, sending the smoke down here to the capital, where it promptly hit the fan: that is, the federal government's ongoing, very nasty, ideologically-charged, potentially explosive confrontation with "El Campo" (that is, the entire agricultural sector, along with the various regional economies that depend upon it).