Read more articles from Richard Brock

The two sides in the Argentine farm strike appear to be digging in their heels as the protest enters its third week. Transportation into the nation’s main export ports has been blocked, with only a handful of trucks delivering grain each day. With the exception of milk and other highly perishable food items, the strike has virtually brought Argentina’s agricultural trade to a halt. Consumer groups are now starting to protest growing food shortages.

The strike was originally expected to last only two days. It was called after the government announced a sweeping overhaul of its export tax structure for grains and derivative products (primarily soybean meal and soy oil) on March 11. The export tax on soybeans was raised from 35% to 46%, while the tax on corn and wheat shipments went up a single percentage point. This action was taken after a series of less dramatic steps by the government failed to bring Argentina’s high food inflation under control.

As mentioned, neither side seems willing to budge. While farmers vowed to continue the nationwide strike indefinitely, Argentina’s President Cristina Fernandez said at a press conference, “I will not give into any extortion — none.”

Argentina is a major player in the global soy product market, and the next few months are when South American nations normally do most of their export business. There are reports some soy-importing nations have already covered needs elsewhere, with Brazil and the U.S. the likely choices. The high export tax is an obvious impediment to export business. Plus, the ongoing unrest raises questions about how reliable a supplier Argentina will be until this conflict is resolved.