Argentine leader firm on farm strike, faces risks

Argentine President Cristina Fernandez is refusing to back down in a bitter political standoff by rejecting farmers' demands that she roll back a tax rise, but her tough approach may be risky.

Argentine farmers went on strike for a second time in two months today, lining roads across the country and holding back grains from export markets to press their demands.

The strike in one of the world's leading agricultural producers deepens a conflict that began in March when farmers led a three-week strike that caused food shortages and handed Fernandez her stiffest test since taking office in December.

The farmers called off the strike to open talks last month, but the negotiations broke down yesterday and farmers responded by launching a new 8 day protest.

Strike could harm economy
"This is the first time the government is confronting a conflict with the economy generating noise, particularly the issue of inflation," said Sergio Berensztein, a political analyst with the polling group Poliarquia. "It is a conflict that could end up costing the government in terms of popularity and stoke economic uncertainty."

Even according to official inflation figures, which are widely seen as underestimating price rises, March's figure was 1.1% the highest monthly rate in a year.

Fernandez defends the export taxes as a way to redistribute wealth and fight inflation in a country where about a quarter of the population lives in poverty. Farm goods account for more than half Argentina's total export earnings.

She has taken a hard-nosed approach in dealing with the farmers. – Reuters