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Argentine president shakes up Cabinet after surprise defeat of farm tax bill

Argentine President Cristina Fernandez replaced her top aide and agriculture minister on Wednesday following the surprise defeat of a government-backed farm tax bill that generated months of crippling protests.

Cabinet chief Alberto Fernandez, one of the president’s closest confidants and her spokesman during the standoff with farmers, wrote in his resignation letter that he was stepping down to give the center-left government a fresh start and let Fernandez choose a “new team.”

Sergio Massa, mayor of a Buenos Aires suburb and former head of the national social security agency, was named as the new Cabinet chief, the official Telam news agency reported.

Carlos Cheppi, formerly the head of the National Institute of Farm and Ranching Technology replaced Agriculture Secretary Javier de Urquiza.

Buenos Aires political analyst Felipe Noguera said it’s too soon to say what changes the new Cabinet members will bring.

“We’re not seeing a change in strategy for now,” Noguera said.

The resignations are the first major shake-up for Fernandez’s administration after last week’s surprise Senate defeat of a package of grain-export tax increases that led to a rebellion by Argentina’s farmers. Months of protests and road blockades had led to sporadic food shortages, hurt the economy and caused Fernandez’s popularity to plunge.

In a bid to ease the crippling standoff, Fernandez, who ordered the tax hikes in March, agreed to submit them to votes in Congress.

The lower house approved the tax hikes, but Fernandez’s own vice president cast a decisive ‘no’ vote in the Senate. The government subsequently canceled the executive order.

The president had hoped the sliding-scale export taxes would hold down prices by encouraging farmers to sell grains locally rather than take advantage of soaring export prices. Farmers argued that they needed to reinvest their profits to remain competitive.

Luciano Miguens, president of one of the protesting farm groups, and analysts said the new agriculture secretary’s technical background could provide momentum to ongoing talks with farmers.

Ricardo Baccarin, chief analyst at Paniagricola SA, a Buenos Aires grain brokerage, said most farmers are now focusing on getting the markets back to normal. Argentina is one of the world’s top four exporters of soybeans, corn, wheat and beef.

“Farmers are concentrating on the commercial aspect now and aren’t thinking so much about politics,” Baccarin said.

In a televised news conference on Wednesday night, the president did not mention the Cabinet shake-up. The president’s office did not return calls.

Polls have shown the popularity of Fernandez — who replaced her husband Nestor Kirchner as president in December — plummeting to near 20 percent.
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