At midnight on May 27, farmers in Argentina began the third strike in less than three months. The strikes are designed to force the Argentine government to negotiate over export taxes on grains that were imposed in March. So far, the government has refused to negotiate with the farmers, and such a hard-line stance could paralyze the industry and cause extreme food shortages in the spring (October-December). In March, Argentine President Cristina Fernández de Kirchner’s government raised taxes on food exports, including corn, beef and wheat, from a fixed rate of 35 percent to about 40 percent. Soy export taxes were raised to 45 percent. The decision to raise export taxes followed a series of policies designed to keep domestic prices down in Argentina — including a six-month export ban on beef in 2006 and a continuing and complex system of price capping. A basic goal of the government is to maintain the trust of the population — mainly the poor — in the wake of a massive economic crisis caused by Argentina's decision to default on its international development loans in 2001. At the time, Argentine President Nestor Kirchner pursued a host of populist measures designed to ensure a steady supply of basic goods to the domestic population — including food and energy. As the country stabilized, the government held to the populist measures, tightening control over the economy instead of allowing it to enter the global market with newfound strength. In maintaining price caps on basic commodities, Argentina forced domestic producers to turn to exports to make any money at all. For the agricultural industry, low revenues mean less investment in successive crop cycles, lower yield and a much less flexible and efficient farming system. The turn to an export-oriented agricultural industry required a crop set that was oriented towards the world market, and in Argentina’s case, this meant ramping up production of soy beans, mainly for export to east and southeast Asia. The most dramatic hike in soy exports was between 2001 and 2005, when exports jumped from 6 billion kilograms to nearly 10 billion kilograms. In shifting to export-oriented production, the Argentine agricultural industry reduced the amount of basic foods produced for the domestic market, including beef and wheat. The government’s attempt to curtail exports of soy is an attempt to eliminate any incentives for the production of food for export. Today, with the price of food commodities soaring, farmers have double the incentive to export. The policy also aimed to encourage production of basic staples for the domestic market — a goal that is sure to bankrupt farmers, given the country’s continuing price caps. The problem, however, is that by restricting every way in which farmers can make money, the government is crippling their ability to produce. Exacerbating the problem is the timing of the dispute: the end of harvest season. During harvest season (March to July for corn and soybeans), Argentina has a relative surplus of grain, and stockpiled grain will keep over the short term. However, in three or four months (through winter), with potential disruptions of the harvest, the expiration of some stockpiled foods and a failure to reinvest in domestically consumed crops, the situation could be dramatically different. Even if the government moves quickly to prevent food shortages in the spring, it may be too late. The government’s decision to avoid talks with the farmers puts more pressure on an already-damaged system. The danger is that the dispute could spiral out of control, sparking the very thing the government seeks to prevent.