Argentine Farmers See Hard Times Ahead With Peronists Poised for Victory

Argentine Farmers See Hard Times Ahead With Peronists Poised for Victory

Oct. 27 elections are likely to bring back political tradition that has taxed countryside’s resources and patience

OLIVA, Argentina—A few months ago, things were looking up for Gabriel de Raedemaeker, a 52-year-old farmer here who was on his way to logging a record harvest.

He planned to invest in costly new equipment to plant seeds and apply fertilizer to the wheat, corn and soybeans he grows on his 1,700-acre farm. He hoped soon to buy cattle again, having sold his herd at a steep loss in 2011 in the face of export restrictions implemented by the populist government in power then.

Now Mr. de Raedemaeker’s optimism is gone as the national Peronist movement is on the verge of returning to power under presidential hopeful Alberto Fernández and his running mate, former President Cristina Kirchner. Argentina’s heartland, known for its cattle and grain fields, is bracing for a return of heavy-handed policies that sparked a broad revolt a decade ago among farmers and ranchers.

The likely ascent of Mr. Fernández, the clear favorite to win the Oct. 27 presidential election, has rattled Wall Street and pro-business followers of President Mauricio Macri. But the anguish over Argentina’s political future is strongest here on the open plains and green pastures that once made this country one of the world’s wealthiest.

“There’s fear of a return to a climate of confrontation,” Mr. de Raedemaeker said at his farm, where dogs hunt hares while caranchos, a South American bird of prey, perch on fence posts. He has decided not to plant corn at the end of the year, unsure if the crop will be profitable come harvest time under the next administration.

“I simply don’t know if I’m going to be able to sell freely with a new government,” he said.

Gabriel de Raedemaeker, a farmer in Córdoba province, worries a new government could bring ‘a climate of confrontation.’
In the August primary vote that confirmed Mr. Fernández’s rising stature, this province, Córdoba, was the only one Mr. Macri won, with voters here apparently willing to discount the soaring inflation and economic stagnation that doomed Mr. Macri’s chances elsewhere.

Mr. Fernández wants to overcome the rural distrust. He recently asked Argentina’s biggest farm associations to set aside the bitter relations with the Peronists and work with him to kick-start the economy if he is elected.

Some here say under Mr. Fernández, farmers and Peronists may find common ground.

“The countryside is fundamental to ignite the economy and start growing again,” he wrote on Twitter in late August after meeting with the agriculture groups. “We’ve left behind our disagreements.”

Carlos Garetto, the former head of the Coninagro agriculture federation, said Mr. Fernández had been moderate in past negotiations with the “ruralistas,” as ranchers and farmers are known here. If he wins office and enacts higher taxes and strict export controls, though, this region will rise up.

“The countryside would react to that,” he said. “And they know, from experience, that farmers are able to defend their position."

Carlos Garetto, former head of an agricultural federation, says Argentina’s ‘ruralistas’ would react strongly to the enactment of higher agricultural taxes.
Many farmers aren’t convinced the Peronists will be moderate. They worry they will be hit by higher taxes on agricultural exports—a policy that brought Ms. Kirchner into clashes with the farm belt—as the next cash-strapped administration seeks foreign currency amid the possibility of default. They are also concerned price controls could be used to assuage anger over rising food costs among urban voters.

As president from 2007 to 2015, Ms. Kirchner accused farmers of being oligarchs and coup-mongers with no interest in the poor. She compared soybeans, the country’s top export earner, to weeds. And while she is running as Mr. Fernández’s vice-presidential running mate, she commands the loyalty of the Peronists’ leftist base.

Uncertain Pastures
Farmers fear a return of heavy-handedpolicies that hamstrung their crops untilMacri took power in 2015.
 

“They’re anti-farmer,” said Walter Orodá, a cattle rancher in Córdoba. “They think the countryside is an endless source of resources to wring out.”

During their 12 years in power, Ms. Kirchner and her late husband and predecessor, Néstor Kirchner, hit grain producers with price controls and high export taxes to fund a surge in public spending and welfare programs. To keep food prices low, they limited beef exports, causing a sharp decline in beef production as the number of cattle fell by about 10 million, according to industry groups.

“I almost lost the farm, I was practically left with nothing,” said Victoriano Lucentti, a rancher who supports Mr. Macri.

By the end of Ms. Kirchner’s term, Argentina, once the world’s third-largest beef exporter, was exporting a quarter of what it sent abroad a decade earlier. Its beef exports fell behind much-smaller nations such as Uruguay, New Zealand and Belarus, according to U.S. Department of Agriculture figures.

A cattle auction in Jesús María in Córdoba province in early September.
Anger boiled over in 2008 when Ms. Kirchner tried putting a sliding-scale tax on soybeans exports. Farmers blocked highways and bridges, halting the export of grains. Mr. Fernández, then Ms. Kirchner’s chief of staff, resigned. Congress rejected the tax.

In her memoir, Ms. Kirchner says she was deeply affected by the revolt, writing that her rural opponents were full of “extreme machismo.”

After taking office in 2015, Mr. Macri quickly eliminated export taxes on beef and corn, and reduced taxes on soybeans. Argentina opened new markets, spurring farmers to plant more.

Argentina and other South American nations recently reached a trade deal with the European Union. Some fear a new government might seek to alter the accord after Mr. Fernandez sharply criticized its terms.

Not everything has gone well for farmers and ranchers under Mr. Macri. Like other Argentines, they are coping with a 55% annual inflation rate, a collapse in consumption and a sharp devaluation of the peso. To reduce the deficit, the government last year reinstated grain-export taxes after seeking a $57 billion bailout from the International Monetary Fund. And the Macri government recently implemented currency controls.

Victor Giordana, here in Jesús María in Córdoba province, has closed an ethanol plant he owns in the face of high interest rates.
Last year, Victor Giordana, an agriculture business owner, halted operations at an ethanol plant that is supplied by corn he grows. Operating the plant became unfeasible after the central bank increased interest rates to about 70%, virtually cutting off access to credit, he said.

“Today, for the first time, I feel hopelessness,” he wrote to Mr. Macri in a letter criticizing government policies. “My concern is that another failure will lead to the return to power of the thieves who governed us for so many decades.”

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