Argentine farm leaders called on the government to guarantee higher prices for wheat farmers Jan. 12, warning growers could resume strikes and other protest measures if their demands are not met.
Argentina, a leading global wheat exporter and Brazil’s key supplier of the grain, has restricted shipments in recent years to guarantee domestic supplies and tame rising prices for staples like bread and pasta.
Farmers say export curbs depress the price they get for wheat as exporters withdraw from the market, making it an unprofitable crop and forcing them to turn their land over to soybeans instead.
“When you’ve got wheat to sell, there’s no one to buy it and there’s no one who wants to pay the full (international) price,” said Mario Llambias, head of the Argentine Rural Confederation (CRA), one of the country’s four main farming associations.
“There’s no market and no buyers. Why? Because the exporters have withdrawn from the market,” he told reporters during a meeting of farmers in Buenos Aires.
Anger over the wheat market has fuelled farmers’ opposition to government agricultural policy and some hardline leaders have called in recent weeks for fresh protests against the government of President Cristina Fernandez.
Farmers halted sales of grains and livestock repeatedly in 2008 and 2009 to protest at export taxes on farm goods such as soybeans, Argentina’s No. 1 export earner. They have also been angered by export curbs on beef, corn and wheat.
Eduardo Buzzi, head of the Argentine Agrarian Federation, said farmers still wanted a cut to export taxes, but that a government move to normalize wheat prices would be seen as a positive sign.
“If they free up exports that would help decongest (the wheat market). This would be an answer, although not the only one,” he said.
“If this isn’t resolved, this is going to be a year of tension and conflict,” he said, adding that farm leaders were “trying to avoid protest measures.”
Argentine farmers are close to concluding the 2009-10 wheat harvest and the Buenos Aires Grains Exchange estimates production at 7.5 million tonnes, the smallest in more than 30 years, according to official data.
However, that still leaves a surplus for export after domestic demand of about six million tonnes has been met. Just over 647,000 tonnes of new-crop wheat have already been shipped abroad, Agriculture Ministry figures show.
The U. S. Department of Agriculture (USDA) estimated the crop at eight million tonnes Jan. 12.
Fernandez defended government intervention in agricultural markets on Monday as she announced a subsidized loan program for small-scale wheat farmers.
She said the 180-day loans meant growers would be able to hold on to their crop until prices rose.
“This shows the state intervening in the market to help sustain prices … to counter those theories that say state intervention always ends up harming farmers,” Fernandez said.
Dutch Watchdog Suspects Flour Sector Cartel
The Dutch competition authority said Jan. 14 it was investigating several companies in the flour industry due to a suspected cartel in the sector.
The NMa said it had made reports on a group of companies at the end of last year after thorough investigation, and said similar action was being taken by counterparts in Germany, Italy and Belgium.
“Everyone eats bread, pasta or other flour products daily. This sort of cartel dupes all Dutch people because they can’t pay a fair price for their staple food,” said Pieter Kalbfleisch, chairman of the NMa, in a statement.
It said the flour industry would be a focus for investigation in the 2010-11 period.
In December, two German flour mills were searched by officials from Germany’s federal cartel agency in an investigation into alleged anti-competitive behaviour.
They were looking into allegations that mills involved in processing of hard durum wheat for production of semolina were in agreements to share customers, set market share quotas and agree prices dating back to 2003.