Brazil & Southern Cone - March 2009 (ISSN 1741-4431)

The authority of Kirchnerismo is weakening. A year ago the ruling Frente Para la Victoria (FPV) boasted a comfortable majority in both houses; now it can barely muster quorum and is at real risk of losing its congressional majority entirely in October's midterm elections. Already under pressure, the FPV suffered two blows in February. First, dissident Peronists and the popular mayor of Buenos Aires, Mauricio Macri, announced a new alliance; and second, seven FPV legislators defected in as many days, including the powerful Peronist senator Carlos Reutemann. The rebellion had its roots in what could pose a formidable threat to President Cristina Fernández's authority ahead of October: the revival of the government's conflict with Argentina's farming sector.

The anti-K alliances: Opposition to the Fernández government ahead of October has coalesced into two fronts: a centre-left coalition of Radicals, Socialists and Elisa Carrió's Coalición Cí­vica (CC); and the centre-right alliance between Partido Justicialista (PJ, Peronist) dissidents and Macri's Propuesta Repúblicana (Pro).  The Pro-PJ dissident alliance allies Macri, whose party controls half of all seats in the Buenos Aires city legislature, with two powerful Buenos Aires deputies: Felipe Solá, a former governor of the province of Buenos Airess, who is popular with the country's rural sector; and Francisco De Narváez, a millionaire businessman who won 15% of the vote when he stood to be governor in 2007 [he lost to the FPV candidate, Daniel Scioli]. Behind the alliance looms the presence of another influential PJ dissident and party veteran, the former president Eduardo Duhalde (2002-2003), who, despite the trio's best efforts to distance themselves from 'Duhaldismo', doubtless helped engineer the agreement.  

The alliance aims to topple Kirchnerismo in the crucial Buenos Aires province, the largest electoral district (accounting for 38% of voters), and where the government will hope to compensate for expected losses in the nation's farming provinces. The three men will, however, have to overcome their personal rivalries if they are to present a convincing challenge to the FPV. Both Solá and Macri harbour presidential ambitions ahead of 2011 (De Narváez cannot run for president as he was born in Colombia), while De Narváez and Solá will vie with each other to head the party list in October. If the trio do succeed in presenting a convincing united front, it is possible that other disaffected Kirchneristas will join their ranks. 

The second challenge to the Kirchners will come from a coalition of traditional opposition parties, made up of the Unión Radical Cí­vica (UCR, Radicals), the Partido Socialista and the CC. Assuming it can remain united, the alliance has the potential to make significant gains in October: the Radicals have struggled to recover following the ignominious end to the presidency of UCR leader Fernando de la Rúa in 2001, but retain a potentially powerful national network, while the CC has a strong presence in both the capital (the country's second largest electoral district) and the main Buenos Aires province. The alliance received a boost in early February, when the popular Vice President, Julio Cobos, who leads the anti-K grouping Consenso Federal (ConFe), said that he would work with the UCR, his former party, with a view to fielding joint candidates in his native province of Mendoza. Cobos is one of several UCR dissidents to rebel against the government, whose “K-Radical" support base has all but evaporated since Fernández came to power in 2007. 

The February exodus: Barely a week after the launch of the Pro-PJ dissident alliance, the FPV received a second blow: the resignation from the party of senator Reutemann, a popular and influential former governor of the central province of Santa Fe. Reutemann left the FPV along with fellow Santa Fe senator Roxana Latorre on 17 February, because, he said, the government was “endangering the interests of [his] province". Two days later, Peronist senators Juan Carlos Romero and Sonia Escudero, from the north-western province of Salta, followed suit. Then, on 23 February, three Peronist deputies, Walter Agosto, Ariel Dalla and former Santa Fe governor and close ally of former president Néstor Kirchner (2003-2007), Jorge Obeid, quit the FPV to join Reutemann's newly formed congressional bloc, Santa Fe Federal. The FPV can now count on around 119 of 276 deputies (a year ago it enjoyed the support of some 153), and 40 of 72 senators (down from 44).

The minor exodus sparked by Reutemann indicates the key role that provincial pressures - and the farming conflict in particular - will have to play in the run up to October's vote. Reutemann, who voted against the government's agricultural export tax reforms last year, is popular with farmers. He is likely to stand for re-election as a senator in October, with a view to the presidency in 2011 [RBS-09-01]. To have run on an FPV ticket in Santa Fe, an agricultural powerhouse where some 76% of voters have a negative opinion of Fernández, would likely have been electoral suicide. The exodus may not be over: if Peronists judge that they are better placed outside of Kirchnerismo, they will not hesitate to jump ship. 

The rural threat: A repeat of last year's conflict with the farming sector, which lasted four months and dealt Fernández's administration a humiliating defeat in the senate, has the potential to derail the government ahead of October. Doubtless mindful of this threat, the government has now agreed to what it did its utmost to avoid in 2008: face-to-face talks. Negotiations began on 24 February, following a four day suspension of grain and cattle sales - the sector's first strike of 2009 - and continued on 3 March, with the surprise appearance of the president herself at talks. Fernández's decision to attend the meeting, a conciliatory gesture intended to demonstrate the government's willingness to resolve the conflict, did not go unheeded by farmers. Union leaders subsequently signed four agreements with the government, including: the elimination of dairy export taxes; an increase in the beef export quota (from 550,000 to 610,000 tonnes); and an increase in domestic wheat prices (from 370 to 420 pesos per tonne).  

The problem is that Fernández cannot afford to bend to the farming sector's principal demand: the reduction of grain and oil seed export taxes, including a 35% levy on soya. The government relies heavily on this revenue to finance public spending, which Fernández has promised to boost further this year in an attempt to stoke Argentina's ailing economy. Union leaders warned after the meeting on 3 March that although significant progress had been made, "the conflict is not resolved".

• Nationalisation rumours

In the lead up to the 3 March meeting between farm leaders and the government, rumours abounded in the local press that the government would announce the creation of a national board to regulate grain trading. The reports enraged farmers, who accused the government of seeking to pressure the sector into selling some nine million tonnes of soya held back from last year's harvest (export duties on which are worth some US$1bn to the government). In the event, Fernández downplayed the rumours of a state take-over, although she did not rule it out, saying that, the government would send the bill to congress “if deemed necessary".