Argentina senate rejects grain tax

Vice-president votes against own government to scupper controversial hike.

    Farmers had threatened to renew strike action if the bill was passed [AFP]

    Al Jazeera's Lucia Newman, reporting from Buenos Aires, said that there was a lot a speculation about whether the vice-president had voted against the bill out of ambition or conviction.

    "Julio Cobos is a very interesting figure because he was expelled from his own political party, the main opposition party in Argentina, when he agreed to run as president Kirchner's running mate, in what was suppose to be a show of consensus," she said.

    Farming wealth

    Kirchner said she had decided to raise the tax on grain exports to redistribute the farming sector's growing wealth from spiralling commodities prices to the country.

    However, farmers had condemned the measure, arguing that it would devastate one of the country's most profitable sectors.

    The vote came after hundreds of thousands of people staged rivals for and against the bill on Tuesday.

    Once the results were announced there were celebrations in the capital Buenos Aires.

    "This whole issue has really become an obsession in Argentina and at times it has even paralysed the country, it's also paralysed Argentine society and mobilised the middle class against the government," Newman said.

    Argentina is one of the biggest food producers in the world, leading with exports of soybean oil and products at $24bn a year.
      
    It is also the second-biggest corn exporter, after the United States, and the fifth-biggest wheat exporter.

    Crippling strikes

    Kirchner had sent the proposal to Congress after months of crippling strikes by farmers following her initial decree raising taxes on soy and grain exports issued in March.

    The bill passed the lower Chamber of Deputies on July 5, where it faced stronger than expected opposition.

    It proposed to raise grain export tariffs from 35 to 47 percent,  on a scale linked to global prices.

    Roadblocks by farmers and truck drivers caused food shortages around the country until farmers suspended their strike in early June, but had threatened to revive the action depending on the outcome of the vote in Congress.
      
    The government bill had called for lower tariffs for small producers, which would benefit 85-90 per cent of Argentine farmers, officials said.
      
    It also proposed setting up a special fund to reinvest some of the tariff revenues in public ventures such as building new hospitals, schools and roads

    SOURCE: Al Jazeera and agencies


    YOU MIGHT ALSO LIKE

    Interactive: How does your country vote at the UN?

    Interactive: How does your country vote at the UN?

    Explore how your country voted on global issues since 1946, as the world gears up for the 74th UN General Assembly.

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.