Argentine citizens hold up banners depicting two historical figures, Che Guevara and Eva Perón. Many citizens, especially those in the lower classes, perceive these individuals as heroes. (Courtesy Ashley Rider)

The new tax policy, which was implemented by President Cristina Kirchner on March 26, increased the tax on exported wheat, corn, and soybeans—three of the most important goods produced by Argentina’s economy—from 35 percent up to 44 percent. Kirchner voiced two motivations behind this decision: first, to make these goods cheaper in domestic markets and second, to foster small businesses by pro- viding them with subsidies.

Despite its good intentions, the policy backfired, and the citizens made their voices heard. Demonstrations rocked the city for almost four months, and the porteños, the people of Buenos Aires, found themselves caught up in a fierce struggle between two of the country’s most powerful forces: President Kirchner and the campo, the farmers who constitute the backbone of Argentina’s economy. While the city residents were not as directly affected by the change as the farmers, they, too, vacated offices, schools, and homes to protest the government, concerned over the increasing food prices associated with the tax.

The export tax dispute ranks as one of the most important challenges to the Argentine economy since its devastating crisis in 2001. In December 2001, Argentine President Fernando de la Rúa officially declared the greatest debt default the world has ever witnessed. The ruined economy left 25 percent of the nation unemployed, and the country’s poverty level shot above 50 percent. Stores were forced to close down indefinitely. Banks limited weekly withdrawal amounts from personal accounts. Citizens were left with no recourse but to en- gage in cacerolazos, a form of street protest where porteños banged pots and pans into the late evening hours.

Seven years later, the porteños brought back the pots and pans to protest the export tax. Within a week of the tax’s introduction, citizens streamed from all directions to the major intersection of Callao and Santa Fe. Parents carrying kitchen utensils were joined by children with flutes and rattles. Their percussion reverberated throughout the city streets as they chanted, “No to the extortion of the farmers! Enough with the shortages!” Buenos Aires did not sleep until after midnight.

For months on end, the issue of agricultural export taxes domi- nated Argentine national life. Every morning the dispute occupied the front page of the Argentine periodical La Nación, which citizens read on their way to work on the colectivos, the city buses. During midday coffee break, the smallest cafes buzzed with conversation as porteños drank their café con leche. And at the close of each day, posters and flyers were distributed to publicize the next protest against Kirchner and her administration.

Argentina’s farmers made their discontent impossible to ignore, erecting barricades around the perimeter of Buenos Aires to block incoming traffic. With the distribution of agricultural goods into the city cut off, supplies of beef, Argentina’s largest consumer good, dwin- dled. Restaurants were forced to double prices or remove beef from their menus. Several grocery stores began rationing basic foods. For about a week, citizens had to adjust to a menu on which pasta was the only item.

Even though the President’s intentions seem praiseworthy, many view her policy as a failure. Federico Bragagnolo, consultant to the Office of the Chief Economist for latin America at the World Bank, commented, “Despite having the intention of lowering prices for do- mestic consumers, the government’s policies are contradicting what they would like to achieve.”

Lucas Gallo Mendoza, a representative for the pro-campo Agricultural Federation of Argentina, explained that it takes a significant amount of capital invested and anywhere from six months to three years to successfully grow wheat, corn, and soybeans. With the government’s taxes, the farmers were left with lower profits and less money available to invest in next year’s harvest. “With less money, producers must now select whether to focus on maintaining efficient levels of productivity or maintaining the quality of the goods,” Mendoza explained. For farmers, even though the goods may be cheaper, the lower prices brought about by Kirchner’s tax scheme prevent the growth of an economy that is still struggling to recover from its crisis seven years ago.

Months after Kirchner imposed her economic policy with the in- tention of helping farmers and small businesses, many businesses had yet to see the financial aid and subsidies that had been promised to them. Sandra Choroszczucha, whose family owns a leather factory that was scheduled to receive economic aid, wondered: “Which in- dustries is the government helping? We have not yet received our credits or subsidies. If anything, we are the ones having to pay more with the higher taxes.” The failure to quickly distribute revenues from the tax has reduced the trust Choroszczucha and other small business owners place in the government, driving her to the streets to join the cacerolazo cries.

While the July revocation of the export tax provoked widespread celebration among Argentina’s citizens, the tax dispute has had far- reaching reverberations. Argentines continue to lose confidence in an economy that let them down in 2001 and lose trust in a president who failed to resolve the issue. After this crisis, the government is left with the task of not only repairing its economy, but also regaining the confidence of its citizens. According to Bragagnolo, the farmer- government dispute can be boiled down to a single sentence. Using the Argentine Spanish word for cash, he said, “All involved parties would like more, but there is just not enough plata to go around.” Still, the government must listen to its citizens when deciding how that money should be used, or Argentina will be seeing more plata protests in years to come.

Esteban Tapetillo is a senior Political Science major in Morse College.

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