The touchiness of the issue of dairy products and the nature of the dairy industry have sparked the first conflict faced by centre-left President Cristina Fernández, who took office on Dec. 10.

After a dispute marked by an incipient milk shortage, the picketing of dairy sector industrial plants and tensions within the government, the industry accepted a price at the farm gate of close to 82 cents of a peso (27 cents of a dollar) per litre in late December.

In the last months of the currency board period (1991-2002) when the Argentine peso was pegged to the dollar, the price of milk was about 10 cents a litre, driving dairy farmers to despair.

In pesos, the price today is eight times higher, although inflation since late 2001 totalled 100 percent, and production costs are partly paid in dollars, which stand at 3.15 pesos.

Source: IPSnews