Argentine President Cristina Kirchner has sacked her economy minister, amid spiralling inflation and her government's bitter conflict with farmers over a tax hike on soybean exports.

Martin Lousteau (36), is to be replaced on Friday by Carlos Fernandez, the head of Argentina's tax collection agency, the state news agency said.

"The president asked Lousteau for his resignation because of differences on how to carry out her economic policy," a government official told AFP early Friday.

Fernandez, an expert on state finance close to former president Nestor Kirchner (2003-2007), is to be sworn in Friday at the presidential palace, state news agency Telam said.

Lousteau who took over the economy portfolio when Kirchner was sworn in on 10 December, leaves his post as her government struggles to resolve a bitter dispute with farmers who staged a crippling three-week strike last month.

At a government function late on Thursday, Nestor Kirchner questioned "economists and leaders who want to cool down the economy," with its accumulated growth rate of 45 percent over five years.

"If the economy cools down, Argentines don't consume, they don't eat, and without consumption, they can export more and earn more," Kirchner said, in a veiled reference to the country's agricultural producers.

On 2 April, Argentina's farmers declared a 30-day halt to a their strike, which was the first major test of the new Kirchner government and, some say, sharply eroded its power.

During their 21-day strike, thousands of farmers erected some 400 road blocks in central Argentina, leading to unprecedented shortages of food and raw materials in major urban centres.

The raising of export tariffs on soya products — the agricultural mainstay of Argentina — from 33 to 44.1 percent triggered the strike.

Farmers said that, along with income taxes, transport costs and the high cost of land, it would push many out of business.

Soybeans are now dubbed "green gold" in Argentina for the sky-high prices they fetch on the world commodity market.

Half of Argentina's 30-million hectares of farmland are now given over to the profitable plants, which represent an export income of $24-billion a year.

The confrontation has deepened divisions between Argentina's upper and middle classes — including many well-off farmers — and the poor class, swollen by the country's 2001 financial collapse, which supports Kirchner.

The fragile truce between the agricultural sector and the government expires 2 May, and could see fresh protests in rural areas.

Agricultural leaders, representing some 250 000 producers, are also challenging the government's policies on wheat and meat, two other key commodities, with consumer prices sharply on the rise.

Government statistics agency Indec has put the annual inflation rate at under 10 percent, whereas private consultants and consumer defence groups place it between 20 and 30 percent.

Argentine stock and bond markets fell this week amid rumours Lousteau would resign.

AFP