On March 11 Argentina’s President Cristina Fernández de Kirchner announced a series of taxes on farm exports such as soya and wheat. Aimed at curbing inflation and improving Argentina’s ever worsening fiscal balance, it was the second major agricultural tax hike in just four months. The announcement proved to be the final straw for thousands of Argentine farmers who, incensed by the new taxes, blocked every major highway in the country. The blockades have continued now for over three months during which time supermarket shelves have slowly emptied and prices for foodstuffs have rocketed.
One of the sectors most hard hit by the farmer’s revolt has been tourism. According to recent figures released by the Argentine Business Federation of Hotels and Restaurants the first three weeks of the blockades alone caused loses in the Argentine tourist industry of 73 million pesos (around $24 million). At the same time thousands of jobs in the tourist industry are now at risk and many hotels and restaurants in Argentina face the possibility of imminent closure unless the blockades are lifted.
Last weekend was a bank holiday in Argentina but, with over 300 roads blocked, an estimated 60% of coaches were marooned on highways and bus stations all over the country. Many coach companies simply stopped issuing tickets altogether. Long distance coach companies also reported a 40% drop in ticket sales in comparison with other weekends.
In response hundreds of tourist industry workers descended on Highway 14 in the province of Entre Rios to vent their frustration at the farmers for the damage they have caused to the tourist industry and the thousands of jobs they are now putting at risk.
Since the devaluation of the peso Argentina has become an increasingly popular tourist destination and the number of tourists has continued to go up year on year by around 10% since 2003. As yet there are no official figures revealing the impact that the crisis has had on the number of foreign visitors entering Argentina but it is likely that the crisis will be most felt in the budget travel sector. This is because the cheapest way to see Argentina is by long-distance coach. Coaches have been held up in some instances for days during the last three months.
Making matters worse for the tourist industry is the fact that the farm workers strike has happened at a time when economists believe that inflation is running at least twice the official rate of 8%. This, coupled with food shortages, is making life very hard for hotel owners all over the county.
“The strike has no doubt affected our business, but it has occurred at a time of the year which is historically slow, so it’s hard to gauge how much it has hurt,” said John Johnston, owner of the Castillo Hotel in Salta.
“In the next month we may have a clearer picture. But what really is clearly curtailing commercial activity in general is inflation, exacerbated by the agricultural paralysis.
“One year ago a kilo of filet cost us 12 pesos ($4) – it’s now up to 24 pesos ($8) and with the blockades it has been sometimes difficult to find in the last few months. International travellers probably don’t perceive the problem unless they go to the same restaurant or hotel over a period of time. Of course, Argentina has a propensity towards inflation, and chaos, and the current government is promoting both.”
This feeling is echoed amongst other hotel owners around the country who might be sympathetic to the farmer’s cause but are now blaming the farmers and an uncompromising government for their plight.
While the stand off is now officially at an end after the government agreed to a reduction in export duty caps last week, many farmers have refused to call off protest action and hundreds of main roads remain blocked. Now Argentine truck drivers, many of whom have spent the last three months out of work due to the blockade, are also blocking roads. The truck drivers want guarantees that the farmers will reopen the grain trade for good. With no guarantees forthcoming the blockades are likely to continue.