Argentina's government will monitor to ensure mills and exporters pay fixed local wheat prices to farmers, local paper La Nacion reported on Saturday, as it braces for a strike by growers next week over export quotas.
Farmers in Argentina, a leading grains exporter, will halt sales of corn, wheat and soybeans to protest a system of export quotas they say drive down prices, reviving a conflict that helped lift global prices to record highs in 2008.
"From next week, we will monitor grains deals to see what prices are paid," Agriculture Deputy Secretary Oscar Solis told the paper, which said any irregularities in payments by mills would be punished with the temporary suspension of government subsidies. Exporters could be asked to repay the difference if any discrepancies are found, Solis said, adding other types of sanctions were possible.
Argentine farmers say the current system of export quotas for wheat and corn, which aims to safeguard domestic stocks and fight inflation, creates an over-supply that lets exporters and millers pay low prices.