By Maximilian Heath
BUENOS AIRES (Reuters) - Farmers in Argentina staged a protest in Santa Fe province on Tuesday to demand lower taxes and a better exchange rate for their exports, amid a prolonged economic slump and historic drought that has battered crops and agricultural output.
Farmers are asking President Alberto Fernandez's government for less burdensome interventionist trade policies and the elimination of export taxes, as they suffer from the worst drought in 60 years.
"We've been warning that the situation for farmers is difficult with drought, with frost," said Carlos Achetoni, president of farm federation FAA, in a video announcing the demonstration posted on Twitter.
Argentina's capital controls have propelled popular informal currency markets where U.S. dollars are twice as expensive as the official, tightly controlled rate. The controls create a disincentive for farmers to export since revenues in dollars have to be converted back to the local peso currency at the lower official rate.
A major producer of soybeans, corn and wheat, Argentina is one of the world's top grains exporters, which provides crucial hard currency for the country's cash-strapped central bank.
Local crops could bring in nearly a quarter fewer export dollars this season versus the previous cycle, according to the Buenos Aires grains exchange.
At the protest, Achetoni called on officials to exempt farmers hit by the drought from paying some taxes, as well as suspend lawsuits against them and repossessions of their land due to some farmers' inability to pay their debts.
He demanded respect for farmers, and pledged to organize more action on their behalf.
Last week, the exchange reduced its crop forecasts for soybeans and corn to 33.5 million tonnes and 41 million tonnes, respectively, from the 48 million tonnes and 50 million tonnes estimated in September.
The FAA protest was also backed by two other influential rural associations, CRA and Coninagro.
Argentina will hold presidential elections later this year. The looming vote presents an uphill battle for Fernandez's ruling Peronist coalition as annual inflation hovers around 100%, one of the highest rates of surging consumer prices in the world.
(Reporting by Maximilian Heath; Writing by Valentine Hilaire; Editing by Brendan O'Boyle and by Sandra Maler)
