Argentine farm talks stall as deadline nears

Argentina's President Cristina Fernandez de Kirchner and Buenos Aires' province Governor Daniel Scioli visit an area affected by fire near Zarate, north of Buenos Aires, April 19, 2008. (REUTERS/Presidential handout)

BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez on Tuesday called for calm as talks with farm leaders grew more tense, raising expectations in financial markets that farmers might go back on strike.

Argentina's farmers staged a three-week strike in March over a tax hike on soy exports, but suspended the protest on April 2 for 30 days in order to negotiate with Fernandez's center-left government.

Farmers have complained of a lack of progress in the negotiations, but Fernandez said discussions should continue.

"We should get back to common sense, responsibility (and) negotiation," she said in a televised speech at the presidential palace in Buenos Aires.

As the end of the 30-day truce draws near, the only concrete development has been an agreement over beef prices and exports. However, that deal has already run into problems and fewer cattle were sent to the main Liniers market on Tuesday.

"The talks are pretty difficult. The only area where we made a small advance was the beef issue, but today we're back to square one," Pablo Orsolini, vice president of the Argentine Agrarian Federation (FAA), told Reuters.

"We're going to carry on negotiating until May 2. We're going to exhaust all avenues, but people are very annoyed and they're already thinking about taking some kind of measure from May 2," he added.

The FAA was one of four agricultural associations that led the strike, which disrupted the country's key grains exports, emptied meat counters and landed Fernandez with her biggest crisis since she took office in December.

UNCERTAINTY

Argentine bonds, the peso currency and stocks took a beating on Tuesday due to the uncertainty over the farm talks, while soy futures at the Chicago Board of Trade closed up, partly on perceptions that the truce in Argentina could break.

If farmers do renew their protest, it is not clear if they would resume the strike tactics seen last month when they halted sales of livestock and grains and manned roadblocks to stop farm goods reaching ports and supermarkets.

Government officials and farm representatives discussed wheat policy on Tuesday and farm leaders said some progress had been made, with the talks set to continue on Wednesday.

"We're looking for points in common ... that's positive," said Mario Llambias, president of the CRA association.

The government has tightly controlled the wheat market in recent years as it seeks to tame rising prices for staples such as bread and pasta.

Argentina is a top five wheat exporter, but the country's exports have repeatedly been restricted in recent years and no wheat export permits have been granted for months.

As negotiations have stalled, farmers have criticized the government for involving Domestic Commerce Secretary Guillermo Moreno, who farmers accuse of using threats.

Some political analysts say the government could be involving Moreno to pressure farmers to accept official proposals.

"Both sides want a deal, but neither wants to give too much ground," said Roberto Bacman of the Center of Public Opinion Studies.

(With additional reporting by Lucas Bergman; Writing by Helen Popper; Editing by David Gregorio)