Many truckers remained on strike in Brazil on Thursday, blocking roads despite an agreement reached late Wednesday night between the government and truck driver unions after a week-long strike. Many strikers spontaneously organized themselves, complicating efforts to control their actions since they are not unionized and do not find the agreement satisfactory. The strike shows the extreme weakness of the Brazilian government, already struggling with anemic economic growth, a giant scandal at Petrobras, and popular discontent over fiscal tightening.
Demanding lower prices for diesel and tolls, freight rates based on distance driven rather than tonnage, and better road conditions, the truckers’ strike started as a single spontaneous highway blockage on February 18. It quickly spread to at least 150 blockages across 10 of Brazil’s 26 states by Wednesday. The strike has caused enormous disruption to Brazilian commerce — deliveries of fuel and spare parts have dried up, causing many farmers and factories to halt operations. Reuters reported that the world’s largest poultry exporter BRF shut two factories for lack of raw materials, and JBS SA, the world’s largest meat producer, will have to shut eight factories as a result of the road blocks. A Fiat Chrysler automobile factory also canceled shifts on Monday and Tuesday due to lack of auto parts.
The timing of the strike is particularly harmful, as Brazil needs to keep its all-import agricultural exports (from a record harvest this year) flowing freely to close a trade deficit and avoid further economic deterioration. 70% of Brazil’s grain is transported by truck, and the ports only have a few days’ worth of stockpiled stores, so those exports may soon be pinched too.
The truckers did succeed in getting some concessions: a six-month fuel price freeze, lower tolls, a revision of the freight cost calculations and working hours, and a one-year suspension of truck-purchase loan repayments to state development banks. That said, they did not get their main demand, a reduction in fuel prices. Despite the steep fall of global fuel prices over the past six months, Brazil has been raising its state-controlled prices through a tax to help bolster fiscal accounts.
However, the government said that the agreement will only be implemented once the truckers unblock all the highways. Union leaders said that they could not guarantee that, and in fact while the strike has eased today, many roadblocks remain. In Santa Catarina state, a major chicken and pork producer and one of the hardest-hit states, at least 13 road blockages were still ongoing, down from 23 yesterday, according to Bloomberg. In Mato Grosso, Brazil’s biggest soybean producer, there were still 10 roadblocks today.
Little wonder then that the government is pulling out all the stops. Police in riot-gear have clashed with protesters, using nonlethal force and arresting truckers. For added measure — and to no doubt dissuade other disaffected groups from launching their own protests and strikes — the government is introducing fines for drivers who block highways that could cost as much as 10,000 reais ($3,470) per hour.