The (unnecessary) crisis is deeper than it first appeared
Despite the exceptional situation brought about in Argentina by the spectacular rise of food prices in the world market, the country finds itself more urgently submerged in the grave confrontation between the central government and the agricultural sector, without a visible exit in the near future. Argentina has buried itself in an unnecessary crisis, the author says, and meanwhile is losing a unique opportunity.
(From La Plata, Argentina) IT IS WITH THIS TITLE that an Argentine newspaper described the chaotic situation that exists in the country these days. After more than three months of conflict between the government and workers from the countryside –beginning with the decision of President Cristina Fernández de Kirchner to raise governmental retentions on the sale of soybeans from 35 percent to a variable rate that could eventually exceed 50 percent–, “Nestor Kirchner accused the agricultural rebels of contributing to the destabilizing political atmosphere by their opposing the retentions”the Argentine problem seems more complicated each day. This is despite the few governmental concessions that have been given, like the decision to authorize the sale of a million tons of wheat.
The agricultural strike is creating a catastrophic situation in the Argentine countryside, with four million liters of milk being tossed daily into the rivers. There is also lack of food for livestock. Chickens are starting to try to eat one another due to the lack of grain. Due to a lack of agricultural cargo, truck drivers have decided to block the roads, which has lead to a 35 percent shortage of basic foods in supermarkets, like meat, pasta, rice, etc.
“Despite a militaristic nostalgia, it would be practically impossible for the army to regain power” All this is compounded by rising oil prices and the fuel shortage that has been felt in various parts of the country. Due to the tense situation, it is common to hear taxi drivers or waiters saying they would be better off if the militarists were back in power. For many taxi drivers, democracy has not been something positive. In their opinion, it has done nothing to develop the country and has only brought lasting conflicts, while during the dictatorship the military managed to create an important infrastructure. These nostalgic sentiments regarding the military dictatorship could be creating a favorable environment for a new military intervention in Argentine politics.
However, despite this militaristic nostalgia, it would be practically impossible for the army to regain power. In the ‘90s, Carlos Menem, using his strong influence, dismantled the army, converting it into an almost symbolic force.
AT AN IMPASSE
The current crisis seems not to have a short term solution. Recently, four agricultural factions (Rural Society Argentina, Argentine Agricultural Federation, CONINAGRO and CARBAP) “The Argentine president’s decision to impose a higher retention rate and not a higher tax has allowed her to keep a surplus of agricultural profits for herself” decided to strengthen their opposition to the government after the June 14th arrest of various picketers in an attempt to break the rural protest.
This decision also comes after the massive gathering in Rosario on May 25th, which showed strong support for the agricultural movement that exists in the country. In effect, the demonstration called by the rural associations managed to draw 300,000 people, while the official protest drew about 50,000 in the province of Salta.
For his part, the leader of the Judicialist Party, Nestor Kirchner, accused the agricultural rebels of contributing to the destabilizing political atmosphere by their opposing the retentions.
The conflict started on March 11th when the Argentine government tried to take advantage of the high price of grain in the international market, increasing the retention of soybean profits to 50 percent. “Even if the idea of retaining part of the surplus to invest in social projects was somehow acceptable, the manner in which it was carried out was wrong” However, the Argentine president’s decision to impose a higher retention rate and not a higher tax has allowed her to keep a surplus of agricultural profits for herself. In effect, only the taxes are distributed at the rate of 60 percent for the federal government and 40 percent for the provinces, but the retentions are a payment retained exclusively for the coffers of executive power. This is without the authorization of the Argentine Congress.
Moreover, the measure that sought to exploit the high prices of food worldwide was taken without considering small farmers. Even if the idea of retaining part of the surplus to invest in social projects was somehow acceptable, the manner in which it was carried out was wrong. It has lead to the unification of all the producers against the executive branch, an event unique to the history of the country.
Generally there are deep divisions between major agricultural groups, as well as rivalries between large and small producers and between ranchers and farmers.
WITHOUT POLITICAL CHECKS AND BALANCES
Despite the fact that various producers are resorting to the Supreme Court to fight the unconstitutionality of the measure, the absence of checks on executive power in Argentina still permits the president to walk all over national institutions. “Argentine federalism was itself severely damaged. The central government monopolizes 60 percent of revenues, and redistributes the funds in an arbitrary manner”
Since the Menem administration and especially since that of Kirchner, Argentine democracy has become a facade. The former president revoked various congressional powers, taking advantage of his overwhelming majority to make decisions without consulting the legislature. With the appointment of various judges, judicial power has also fallen to the executive. Even the opposing party, the Radical Party, was dismantled to the point that Cristina opted to offer the radical leader the office of vice president.
Thus, there only remains one party in the country, the Judicialism party, which contains many factions. The opposition is limited to small parties with no real control. Only a few figures have managed to gain influence, as is the case with the governor of Federal Capital, Mauricio Macri, or the Rodríguez Saá brothers, the real chiefs of San Luis.
LOSING A (NEW) OPPORTUNITY
Argentine federalism was itself severely damaged. During his administration, Carlos Menem reformed the constitution in order to decentralize administrative activities. This included allowing for provinces to autonomously make international agreements, provided that they did not run contrary to executive power. Moreover, he transferred education issues, security, and healthcare to regional powers without giving them funds associated with these activities. The central government monopolizes 60 percent of revenues, in addition to its retentions like those taken from farmers, and redistributes the funds in an arbitrary manner. This is what permits them to control the national political process.
Thus, despite an exceptionally favorable situation for Argentina due to higher food prices in the global food market, the country cannot take advantage of it and may lose a unique opportunity in addition to plunging itself into an unnecessary crisis.