Tax row reaches Argentine Senate

Supporters on both sides turned out in force at demonstrations on Tuesday

The Argentine Senate is debating controversial tax increases on agricultural exports that have provoked repeated protests by farmers.

The lower house of Congress approved the taxes after a heated debate and the Senate vote is likely to be tight.

On the eve of the vote, farmers and government supporters held rival rallies in the capital, Buenos Aires.

Farmers say the taxes are crippling, but the government argues that they are needed to help fight poverty.

Argentina is a major producer of soya, grains and beef which fetch high prices on international markets.

The Senate began debating the issue at 1030 (1330 GMT) and it was expected that discussions would take several hours, with pressure mounting on a handful of still undecided senators.

On Tuesday, tens of thousands of supporters of President Cristina Fernandez de Kirchner and reportedly some 200,000 anti-government protesters staged rival demonstrations in Buenos Aires.

Price boom

The BBC's Daniel Schweimler in the city says that whichever way the vote goes, the four-month-long dispute is likely to continue as the two sides become increasingly entrenched and the Argentine people increasingly divided.

That will inevitably affect supplies and prices of soya, grains and beef in both Argentina and beyond, he adds.

The dispute began in March when President Fernandez's government raised taxes on soya exports from 35% to 45% and imposed new taxes on other farm exports.

The government argues that this is a way of redistributing the wealth resulting from the worldwide boom in food prices to poorer Argentines.

Farmers' leaders say the new taxes will cripple the rural economy.

E-mail this to a friend

Printable version