A woman president scorned – by her most trusted ally

After watching its glamorous female president and the all-powerful farming lobby fight each other to a standstill, Argentina was stunned yesterday by one of the most dramatic political betrayals in living memory.

A crisis which has seen months of protests and threatened to starve the cities as the country's legendary gauchos battled against new taxes on agricultural exports, ended with a crushing Senate defeat for President Cristina Fernandez de Kirchner that left her seven-month-old government severely weakened.

At the end of an 18-hour debate on the new tax bill, the final word came from her closest political ally, Vice-President Julio Cobos, who was close to tears as he cast the deciding vote against his boss. Their dispute centres on plans to raise the tax on soy exports, Argentina's main foreign currency earner, to almost 50 per cent. But it is being seen as a harbinger of the way in which the global food crisis could destabilise governments worldwide.

The real importance of the farmers' victory was clear on the streets outside Congress. Hundreds of government supporters who had gathered to await the outcome of the vote screamed "assassin, assassin" at the building, which was guarded by riot police. In a nearby park, farming supporters who had watched the debate on a big screen chanted: "Argentina, Argentina" as the heads of the four main agricultural organisations embraced.

Inside the Senate, Mr Cobos, the man who played Brutus to his confrontational President's Caesar, came close to breaking down. "This is the most difficult day of my life," he told the hushed chamber as dawn broke. "But I can't support [this bill]. The President will understand." With ruling-party senators throwing up their hands in disbelief, he added: "May history judge me. I ask forgiveness if I am wrong."

The result is a major setback for the government of President Fernandez, who succeeded her husband Nestor Kirchner in December. However, commentators agreed that Argentina, with its periods of military dictatorship and economic chaos still not faded from the national memory, has emerged from the conflict with its 25-year-old democracy reinforced. "This is an obvious political defeat for Cristina Fernandez but it's also an opportunity," said Fernando Laborda, a political analyst. "It is unheard of in the history of Argentina that a vice-president, in his role as Senate speaker, [should] vote against the government. But it means that Congress has shown itself to be independent in the face of the executive power, and our institutions have come out stronger than before."

Mrs Fernandez decreed in March that export duty on grains should go up, in the case of soy from 35 per cent to 45 cent, and proposed new taxes on other farm exports. She claimed the increases were crucial to keeping down food prices and redistributing wealth in Argentina, the world's third-largest soy producer. Her proposals, designed to raise $1.5bn in new tax revenue for the government, were passed by the lower house of parliament earlier this month, and it seemed Mrs Fernandez was on the brink of getting her way. All that remained was securing approval in the Senate.

But farmers considered the measure to be the final straw in their already sour relationship with the nascent government and took to the streets, blocking roads and halting exports. Their protests threatened to cripple an economy heavily dependent on farming and agricultural exports. It also brought hardship to ordinary people as supermarket shelves in Buenos Aires were left empty of meat and other basic commodities became scarce.

The food shortages also helped to stoke inflation, which has risen sharply and threatens to undo the years of economic progress since Argentina's financial meltdown in 2001. While the government says inflation is at less than 10 per cent, economists believe it is perhaps as high as 20 per cent.

In spite of the stakes, both the government and the farmers stuck to their positions. At the same time, Mrs Fernandez's role was gradually eclipsed by that of her husband. As leader of a powerful, Peronist political party, Mr Kirchner repeatedly railed against the farmers, accusing them of being "oligarchs" and "coup-plotters".

There seemed no limit to the rhetorical bombshells hurled from both sides. Over time, public opinion shifted in favour of the farmers. Mrs Fernandez's popularity fell to about 20 per cent last month, down from almost 60 per cent in January. The conflict culminated in mass rallies on Tuesday. More than 200,000 people in the Buenos Aires suburb of Palermo demonstrated in support of the farmers, while close to 100,000 government loyalists massed in the square in front of Congress. Mr Kirchner told them that the government would abide by the Senate's ruling "whatever the decision". With his wife's hands apparently now tied, jubilant farmers expect Mrs Fernandez to annul the 11 March decree to raise export tax.

"Cobos didn't vote against the government, but in favour of the people," said Eduardo Buzzi, head of the largest farming union, the Federació*Agraria Argentina.

Mr Cobos was invited to become Mrs Fernandez's presidential running mate last year in an attempt to broaden her support. That decision cost him his membership of the opposition Radical party but, as the divisions in the country deepened in recent weeks, he became the only voice in government calling for a compromise.

Asked yesterday what he would do if Mrs Fernandez asked for his resignation, a weary Mr Cobos replied: "I am not thinking of resigning. I voted according to my conscience and I hope the message I wanted to give is understood."

Latin America's women leaders

Cristina Fernandez de Kirchner, 54, a lawyer who was elected President of Argentina last year, apparently struck a blow for the empowerment of women in the macho world of Latin American politics. In her first speech as leader, she issued a rallying cry to her "sisters in gender" – whether they were factory workers, housewives or professionals – to join her in public life. "I know we can all do great work," she said. But neither she nor her Chilean counterpart Michelle Bachelet, 56, have had an easy ride. Since she was elected in 2006, Ms Bachelet, a single mother who survived torture under Pinochet's regime, has complained about machismo and sexist attitudes towards women in politics. She says they are damned as "hysterical" if they show any flash of steel. Ms Fernandez's battle with the farmers has seen her approval rating fall to 20 per cent. Latin America's most powerful women may now wish to confer on tactics. They are friends who speak regularly and last year intervened jointly to cool an spat between the (male) presidents of Venez-uela, Ecuador and Colombia.