ARGENTINA:Argentinian president Cristina Fernandez suffered a sharp political blow yesterday after her vice-president cast the deciding vote in the Senate to reject a tax increase on soy exports that had triggered months of anti-government protests by farmers.
The vote by vice-president Julio Cobos against a government Bill seeking to ratify the tax increase broke a deadlocked Senate vote after nearly 18 hours of debate.
"This is the most difficult day of my life," Mr Cobos told a hushed Senate chamber. "But I can't support [this Bill]. The president will understand." Mr Cobos is a member of a group from the opposition Radical Civic Union party that backs the ruling Peronist party. Ms Fernandez brought him in as her running mate last year in a bid to demonstrate broad political support for her candidacy.
But he has clashed with Ms Fernandez over her handling of the long-running farm conflict.
Hoping to defuse a political crisis, she asked Congress to vote on a sliding-scale system her government put in place in March that raised levies on shipments of soy, the country's top crop.
The lower house of Congress narrowly approved the measure. But several opposition senators said the upper chamber's rejection of the Bill would force Ms Fernandez to scrap an executive order she used to impose the tax increase.
The reversal in the Senate underscored growing frustration among some Argentinians with government economic policies built partly on grain export taxes and state intervention.
Protesting farmers have demanded the government roll back or modify the tax measures, which link levies to soaring global grain prices.
Hundreds of farmers who followed the debate on big-screen televisions set up in a Buenos Aires park erupted in cheers after Mr Cobos announced his vote.
Outside Congress, hundreds of government supporters who had gathered to await the outcome of the vote fell silent.
Ms Fernandez's introduction of the tax measure sparked a political crisis that has divided Argentina and interrupted agricultural exports.
More than 300,000 people attended rival rallies for and against the export taxes in the capital on Tuesday. She defended the higher taxes as a key part of her economic plan to contain inflation and redistribute wealth from a commodities boom.
Farmers, fed up with price caps and export curbs on wheat and beef, say they are again being squeezed to finance growing government spending.
Congress has largely been a rubber stamp for Ms Fernandez and her husband and predecessor, Nestor Kirchner, who oversaw Argentina's spectacular rebound from a deep recession at the start of the decade.
But some Peronist senators from rural provinces have broken ranks with her over the soy tax as farm groups persuaded them it would hurt the agricultural sector.
The sliding-scale tax on grains and oilseeds eliminated a fixed-rate tariff. At current prices, the new tax regime raises export duties on soy, which represents 24 per cent of total exports and brought in $13 billion last year.
In the fight with opponents over the tax increase, Ms Fernandez and Mr Kirchner have accused farmers of backing a bloody military dictatorship 30 years ago and trying to undermine her government.
Farmers have led a series of strikes in opposition to the measure, fuelling a rise in global soy prices and disrupting exports from the country, one of the world's top suppliers of soy, corn, wheat and beef.
Ms Fernandez took office in December, pledging to continue her husband's policies, but her approval rating has plunged as many Argentinians see her as being inflexible in the farm dispute. - (Reuters)