BUENOS AIRES—Argentine President Cristina Fernandez won a reprieve when farmers ended a three-week strike over taxes, but the standoff has exposed some of her government's political and economic weaknesses.
The center-left leader refused to repeal her tax hike on soy exports as farmers threw up roadblocks nationwide, causing food shortages and halting grains exports from one of the world's bread baskets.
The strike posed the biggest test for Fernandez since she took office in December, succeeding her husband Nestor Kirchner as president.
Farmers opted for negotiations on Wednesday, calling off their protests and pulling down highway barricades to allow grains, meat and other goods to get to market. It eased the pressure on Fernandez as the farmers suspended the strike for 30 days pending talks.
"Boasting of a victory would not only be a political error, but unjustified," Joaquin Morales Sola, a political columnist, wrote Thursday in the Buenos Aires daily La Nacion.
The farmers' strike was the largest anti-government demonstration since Argentina's 2001-02 economic crisis.
Fernandez lured them to the negotiating table by offering tax rebates for small farmers. They may also have decided to open talks before public anger over dwindling fresh food supplies turned against them.
Fernandez countered the strike relying mostly on tough talk. She led a huge pro-government rally to show her resolve and likened the farmers to backers of a 1970s military coup that imposed a brutal dictatorship.
Street Protests
Her tough approach throughout the conflict pushed thousands of middle-class Argentines into the streets for three straight nights in pot-banging protests. Critics deride the Kirchners' style as arrogant and authoritarian.
"I think the pot-banging protests scared the government and showed there is deeper discontent," said Michael Shifter, an analyst with Inter-American Dialogue in Washington.
The farm strike was aimed at the heart of the government's interventionist economic model—export taxes on grains and natural resource exports.
The economic program has helped bring Argentina back from a deep financial crisis with five years of growth above 8 percent a year, budget and trade surpluses and increasing employment.
But the boom has unleashed inflation and farmers have bristled at a string of government measures such as export bans and price caps aimed at taming domestic food prices.
Argentines increasingly complain about rising prices. Inflation was officially reported as 8.5 percent last year, but private estimates put it at twice that much, and the government has been accused of underreporting the figures.
Their overall successes have made the Kirchners popular and arguably Argentina's most powerful leaders in years, so the farmers' strike and street protests were an unexpected jolt to their confidence.
"The government's fear is emboldening other economic groups," said Chris Garman, the director for Latin America at Eurasia Group in New York.
"After years of strong popularity ... this seems to be the first time we saw indications of groups willing to take them on. And that may be saying something of things to come," said Felipe Illanes, chief Latin America economist for Merrill Lynch.
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