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Argentine president drops farm tax after mass protests

  • Story Highlights
  • Argentine president had imposed a 44 percent grain export tax
  • Farmers launched strikes and roadblocks to protest measure
  • Cancellation comes after Argentina's Senate narrowly rejected tax
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From Carolina Cayazzo
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BUENOS AIRES, Argentina (CNN) -- Argentine President Cristina Fernandez de Kirchner is dropping an agricultural export tax that has provoked months of protests from farmers, a spokesman said Friday.

Chief of Cabinet Alberto Fernandez said in a televised address that Fernandez had signed a decree canceling the tax. She had imposed the 44 percent export tax -- which applied to soybeans, wheat, corn and sunflower seeds -- on March 11 without consulting Congress.

The move to drop the tax comes a day after the country's Senate narrowly rejected the tax, with Vice President Julio Cobos casting the decisive vote. The lower house, the Chamber of Deputies, had already approved the increase.

Cobos' tie-breaking vote followed two split ballots of 36-36, and more than 17 hours of debate.

"This doesn't mean that I am betraying anyone," Cobos said. "I am acting according to my convictions."

The tax was the cause of a four-month standoff between the government and farmers.

Farmers sporadically cut off transportation routes in Argentina in an effort to hit the government's coffers. In those cases, food normally shipped to Europe and Asia did not make it to port.

In a concession to her critics, the president said last month that she was sending the measure to Congress to debate.

Fernandez had argued that the export tax paid for government increases in seniors' pensions and help for the poor, and she had rejected the farmers' demand for a repeal, calling their actions "extortion."

Argentina is the world's second-largest corn exporter and third-largest soybean supplier. The farming sector is widely credited with helping the country rebound from a devastating economic crisis in 2001.

All About ArgentinaCristina Fernandez de Kirchner

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