Argentina-Proposals for farmers.

ARGENTINA-

Argentina will present farmers with a proposal to create a mixed, public-private agency to intervene in the grains trade, the state’s latest bid to boost control over the economy, media reported Monday.

Government officials are due to meet with leaders of the country’s four largest farm groups Tuesday, amid a flurry of reports about a possible state intervention in the grains and cattle trade.

Farmers recently renewed protests against government policy, calling for lower export taxes and measures to offset damage done by a severe drought. Farmers staged a tax revolt last year, sparking a political crisis in one of the world’s top suppliers of soybeans, corn, wheat and beef.

Leading daily Clarin Monday cited unnamed sources saying the government wants to create a "Commercialization Agency" to influence market prices. The state would hold a 51 percent stake and farmers would have the remaining participation.

La Nacion newspaper also mentioned the possible creation of a mixed entity to intervene in the grains trade, but it did not provide details.

A government source confirmed with Reuters that such a plan was being considered but said nothing further.

Mario Llambias, president of the Argentine Rural Confederations (CRA), told Clarin: "We won’t know what this is all about until we read the fine print."

U.S. grains traders said the prospect of Argentine farmers selling their stocks in reaction to any intervention pressured soybean futures lower.

But local grain market activity was next to nil Friday and at midday on Monday, due to the uncertainty.

"No deals have been done so far today," said a trader in the main grains port of Rosario. "Everybody is waiting to see what happens."

Talk of a possible all-out nationalization of the grains and cattle markets -- with the state controlling purchases and sales of goods -- has eased after first emerging last Friday.

President Cristina Fernandez addressed Congress Sunday but announced no specific measures.

"We need new instruments that will allow us to intervene adequately in the economy to preserve jobs and generate activity," the center-left leader said.

On Saturday, almost 30 farm groups published full-page newspaper advertisements titled "Argentina in Reverse," warning that state intervention could spark demonstrations and paralyze the sector.

Local financial markets reeled last year when the government shifted Argentina’s mixed social security system to an entirely state plan, nationalizing private pension-fund assets. Fernandez’s allies in Congress also approved the state takeover of flagship airline Aerolineas Argentinas.