May 1 (Bloomberg) -- Argentine farmers are meeting today to decide what action to take in their campaign to pressure the government to repeal tax increases on agricultural exports and price caps on domestic food products.

A government decision last night to lift a ban on meat exports and ease limits on wheat went only part of the way to meeting farmers' demands, said Nestor Roulet, vice president of the Argentine Rural Confederation.

``We are convinced this isn't enough,'' Roulet said in telephone interview from Buenos Aires. ``We have to decide whether to hold a protest now or hold off on further action.''

On April 2, farmers suspended a three-week protest that included the blockade of main highways. As a result, major cities suffered food shortages and exports of grains and oilseeds were paralyzed. Farm leaders gave the government 30 days to satisfy their demands, which included increased prices for milk, beef and wheat, the removal of restrictions on exports and the abolition of a sliding scale of taxes on some exports.

President Cristina Fernandez de Kirchner said during the protests that her government's agricultural policy aims to rein in inflation and guarantee the nation has adequate supplies of food.

Protest Decision

At meetings across the country, farmers will decide whether to resume protests when the 30-day truce expires tomorrow, or await further talks the government has called for May 6, Roulet said.

Argentina's Rural Society, the country's biggest farm group, will vote against blocking highways as a form of protest while talks continue, President Luciano Miguens said. The four major farm groups will meet tomorrow to decide whether roadblocks should again be part of the protests, he said.

``We are going to say no to blocking the highways,'' Miguens told reporters. ``This won't be helpful to our industry.''

In Chicago, soybean prices plunged to a four-week low as traders speculated the dispute won't cause major disruptions in exports from Argentina, the world's third-largest shipper of the oilseed behind the U.S. and Brazil.

Withholding Supply

As part of the protests, farmers may continue to refuse to sell produce or send cattle to slaughterhouses and defer purchases of tractors and other machinery, said Carlos Garetto, vice-president of a farm group known as Coninagro. They also plan a publicity campaign explaining the reasons for their demands.

Volumes of grain and oilseeds arriving at ports on the Parana River were ``normal,'' Alberto Rodriguez, president of the Argentine Vegetable Oil Chamber and Cereals Export Center, known as CIARA-CEC, said in an interview yesterday.

Cabinet Chief Alberto Fernandez, in a presentation to congress last night, defended the government's new sliding-scale for exports of soybeans and sunflower seeds. The system, introduced March 12, taxes exports at more than 40 percent, given current market prices. Previously, a flat rate of 35 percent was levied.

``The variable-tax regime is far fairer than having fixed- export taxes,'' Fernandez said. ``If the producer does poorly, we do poorly. If he does well, we do well. We share in his luck or his misfortune.''

Higher taxes on soybeans are necessary to discourage farmers from devoting too much land to the oilseed at the expense of traditional activities, such as cattle ranching and growing wheat, he said.

Soybean Rally

Surging demand from Asia has pushed up the price of soybeans, which are used mainly as animal feed, by 71 percent in the past 12 months on the Chicago Mercantile Exchange.

Soybean futures for July delivery fell 43 cents, or 3.3 percent, to $12.71 a bushel on the Chicago Board of Trade, after touching $12.44, the lowest since April 3. The price has dropped 20 percent since reaching a record $15.8625 on March 3, as U.S. farmers said they will plant more this year and South America began to harvest record crops.

Argentina is the world's second-largest corn exporter and the fourth-largest exporters of wheat. Cereals, oilseeds and other agricultural produce accounted for more than half of the country's exports in the first two months of this year.

Former Economy Minister Martin Lousteau, who designed the new tax regime, stepped down on April 24. The system also included a variable-export-tax rate for corn and wheat.

To lessen the impact of the new tax system, the government has offered tax rebates and other subsidies to small-scale farmers.

Infrastructure Spending

Farmers say their contribution to Argentina's economy, which has expanded more than 8 percent in each of the past five years, hasn't been rewarded with higher government spending on infrastructure in the provinces of the fertile Pampas plains.

The government's policies have created ``almost total paralysis'' in Argentina's agricultural provinces as farmers put off purchases of machinery, crop chemicals and fertilizer, Miguens said.

Sales of tractors and other agricultural equipment slumped 70 percent in April from a year earlier as farmers halted purchases for the coming crop year, said Jorge Luis Medica, a secretary of the Argentine Chamber of Producers of Agriculture Machinery.

There is still a ``very high probability'' of protests, said Eduardo Buzzi, head of the Argentine Agrarian Federation, which represents smaller farmers.

To contact the reporters on this story: Matthew Craze in Buenos Aires at mcraze@bloomberg.net.

Last Updated: May 1, 2008 16:40 EDT