US embassy cable - 05LIMA2335

UNCLAS SECTION 01 OF 03 LIMA 002335 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PINS, EAGR, ETRD, CASC, PE 
SUBJECT: STRIKES BY AGRICULTURAL PRODUCERS AFFECT TEN 
REGIONS 
 
REF: A. LIMA 2115 
 
     B. LIMA 1707 
 
-------- 
SUMMARY 
-------- 
 
1.  (SBU) Agricultural producers from 10 departments, all 
with distinct agendas, began a series of strikes and road 
blockages on 5/23.  The GOP quickly reached an accommodation 
with potato growers in the south, and remains in negotiation 
with rice farmers from the north.  Textile manufacturers and 
other aggrieved groups also launched demonstrations. 
President Alejandro Toledo's absence from the country (on a 
two week trip to the Middle East and China) complicates the 
Government's ability to deal with the protests.  Acting 
President David Waisman has not provided signs of leadership: 
 siding with the textile protests and challenging 
non-protectionist Cabinet members to resign.  Agricultural 
Minister Manuel Manrique, in turn, blamed the Finance 
Ministry for not providing him with enough funds to meet 
agricultural producers' demands.  The disturbances have 
not/not threatened American citizens:  the Peace Corps 
reports that all of its volunteers in the affected regions 
have been contacted and are safe.  END SUMMARY. 
 
--------------------------------- 
STRIKES BY AGRICULTURAL PRODUCERS 
--------------------------------- 
 
2.  (U) The strike action by agricultural producers blocked 
roads and closed down businesses in seven northern 
departments -- Cajamarca, Lambayeque, Piura, Tumbes, 
Amazonas, Loreto and San Martin -- and three southern 
departments -- Ayachucho, Cusco, and Puno.  Violence has been 
minimal to date.  Most strikes had a self-declared 48-hour 
time limit, although those in San Martin and in the southern 
deparments were termed "indefinite."  The protesters pushed 
divergent demands.  Rice farmers from the northern coast and 
Amazonian regions demanded that the government restrict 
imports, offer better planning for the rice harvest (bumper 
crops on the northern desert coast after two years of drought 
have depressed prices), and purchase surpluses from the 
farmers.  They also charged that rice mills were colluding to 
pay low prices for their product (an accusation denied by the 
millers organization) and held demonstrations against the 
U.S.-Andean Free Trade Agreement (FTA).  Cotton farmers in 
Lambayeque asked to participate in a program offered to their 
counterparts in Ica, whereby the GOP subsidizes producers 
affected by imports.  Potato growers from Ayacucho demanded 
that the GOP buy up their surplus production.  Finally, a 
number of groups requested that the GOP expand the credits 
offered by the GOP's Agricultural Bank. 
 
3.  (SBU) Agriculture Minister Manrique reached an accord 
with potato farmers in Ayacucho on 5/24, under which the GOP 
will buy up over 4,000 tons of potatoes from Ayacucho area 
growers (about 4 percent of Ayacucho's potato production), 
half of which would be used in the upcoming Potato Festival 
in Lima (May 27-30).  Negotiations are ongoing in Lima with 
San Martin Regional President Julio Cardenas.  Polcouns, on 
5/25, spoke with APRA Congressman Aurelio Pastor, who had 
flown to San Martin two days earlier to touch base with 
constituents and participate in talks with the GOP.  Pastor 
said that the situation in San Martin was peaceful, and that 
he was flying back to Lima to take part in negotiations 
there.  He added that he did not/not expect the strike to be 
resolved until the weekend, as any agreement reached in Lima 
would have to be ratified by strike leaders in his 
department. 
 
---------------------------- 
Others Jump On Protest Train 
---------------------------- 
 
4.  (U) Other disaffected or politically motivated groups 
have joined the protest bandwagon: 
 
--  Between 3,500 and 4,000 textile manufacturers and their 
employees organized a march in Lima on 5/24, demanding higher 
tariffs on Chinese imports.  They met with congressmen and 
with Acting President Waisman, whom they said endorsed their 
call for enhanced protection measures.  Vice Minister of 
Industry Antonio Castillo, however, cautioned that additional 
import "safeguards" could only be imposed after a survey of 
textile producers is carried out in late June (to be reported 
septel). 
 
--  Seven thousand nurses in public hospitals and clinics 
also began an indefinite nationwide strike on 5/24.  Press 
reports indicated that nurses were not available for most 
routine functions in Lima-area clinics, though nurses 
attached to emergency rooms were reporting to work. 
 
--  In Espinar, Cusco Department, left-wing anti-mining, 
anti-APRA groups also rode piggyback on the farmers' actions. 
 A crowd of 1500 made up largely secondary school and 
university students attempted to enter the Tintaya Mine on 
5/24.  They were repelled by Police, but the mine has been 
temporarily closed by its owner, Australian company BHP 
Billiton.  Ironically, the Tintaya Mine has distinguished 
itself for its flexibility and willingness to work with both 
the NGO Oxfam America and local communities in a promising 
dialogue table established in 2002 (Ref A).  Oxfam reps told 
Poloff that the protest was the product of area left-wing 
groups who opposed the local Mayor, a member of the APRA 
Party, who was party to a 2003 agreement with the mining 
company to promote local development. 
 
--  Local villagers in Puno blocked access to the islands of 
Lake Titicaca, compelling 10 boats with more than 200 
tourists to abandon plans to visit those areas.  The 
protesters rejected the recent designation of the lake and 
its island as a natural reserve, which they alleged prevents 
them from fully using the area's natural resources. 
 
-------------------- 
LEADERSHIP QUESTIONS 
-------------------- 
 
5.  (SBU) With President Toledo out of the country on a 
two-week trip to Asia and the Middle East, the GOP has 
not/not demonstrated leadership in addressing the strikes and 
road blockages.  Acting President Waisman has yet to comment 
on the strikes, although he did voice his support for 
increased protection for Peruvian textile manufactures and 
challenged anti-protectionist ministers to submit their 
resignations to President Toledo upon the latter's return. 
Agriculture Minister Manrique was able to settle the Ayacucho 
potato growers strike, using funds that appear to have 
already been earmarked to purchase supplies for the "Potato 
Festival."  Manrique, however, basically threw up his hands 
at resolving the other agricultural protests, complaining 
that the Finance Ministry has not/not provided him with the 
financial resources needed to address agricultural needs and 
demands. 
 
-------------------- 
POLITICAL INFLUENCE? 
-------------------- 
 
6.  (U) Labor Minister Juan Sheput, on 5/24, claimed that the 
strikes and road blockages were largely motivated by 
unidentified anti-government parties.  Opposition APRA party 
Congressman (and party co-Secretary General) Jorge del 
Castillo then played into Sheput's hands when he criticized 
Toledo for leaving the country without leadership when it was 
"boiling." 
 
---------------------------------- 
NO REPORTS OF AMERICANS IN TROUBLE 
---------------------------------- 
 
7.  (U) The Embassy has not/not received any reports of 
Americans in trouble as a result of the strikes.  Three of 
the ten affected regions -- Piura, Lambayeque and Cajamarca 
-- house Peace Corps volunteers.  All are safe and accounted 
for.  Only the Piura volunteers have found that the strike 
affects their work.  They have been instructed to stay at 
home during the duration of the farmers' action. 
 
--------- 
COMMENT 
--------- 
 
8.  (SBU) While the agricultural protestors have diverse 
interests and demands, they appear to have effectively 
organized a coalition of the disaffected and even attracted 
additional groups (textile manufacturers) to ride their 
coat-tails.  With Toledo out of the country, the GOP so far 
has been at a loss how to respond to the demonstrations and 
road blockages.  This may not prove damaging if most protests 
end after 48-hours, as planned.  If not, then the GOP may be 
forced to declare a State of Emergency, as it did in May 
2003, when striking agricultural producers shut down much of 
the interior.  This could result in Toledo cutting short his 
foreign travel.  The demonstrations by rice farmers will 
likely be the most difficult to resolve:  domestic 
overproduction coupled with imports (mostly from Uruguay, 
which Peru's agreement with MERCOSUR shields against 
protectionist measures) has depressed prices, particularly 
for producers in San Martin and Amazonas.  If past patterns 
hold, we can expect that the GOP will try to mollify the 
aggrieved with minimal concessions and promises to address 
fundamental issues in the future. 
STRUBLE