(Updates with market close)
BUENOS AIRES, March 31 (Reuters) - Argentine bond prices slipped on Monday as a strike by farmers dragged on, causing risk aversion among investors, while the peso also weakened, traders said.
Government debt prices <AR/BONOS> fell 1.5 percent on average. The losers were led by the dollar-denominated Discount bond, which shed 2.0 percent.
"Government debt prices were the most affected by the agricultural conflict," consulting group Portfolio Personal said in a report. "The market is wondering if the conflict ... will prompt a change in the current economic model and the style of government."
The 19-day-old farm strike over a tax hike on soy exports has halted most grain shipments abroad, emptied meat counters and provoked a political crisis for President Cristina Fernandez.
Argentine bonds' risk spread over U.S. Treasuries, as measured by investment bank JP Morgan, widened 24 basic points to 583 basic points, the EMBI+ showed at 1950 GMT.
Suspicions of manipulation of official inflation figures, which are used to update more than 40 percent of government debt prices, have made investors adverse to Argentine bonds.
In addition, JP Morgan recommended last week selling Argentine bonds due to the farm protest.
On the foreign exchange market, the peso weakened 0.16 percent to 3.1675/3.1700 ARS=RASL per dollar in formal interbank trade, where the central bank intervenes.
The depreciation was eased by the central bank, which sold dollars to compensate for the lack of dollars caused by reduced agricultural exports.
With foreign reserves at historic levels of more than $50 billion, the central bank has plenty of leeway to control the foreign exchange market, analysts say.
In informal trade between foreign exchange houses, as measured by Reuters, the peso ARSB= weakened 0.08 percent to 3.1850/3.1875.
The Argentine stock market rose for a fifth straight session, mirroring Wall Street's gains, amid end-of-month selective buying in cautious trade as the deadlock between farmers and the government continued.
The benchmark MerVal .MERV index inched up 0.67 percent to 2,103.72 points, cutting losses in March to 2.7 percent.
In the last five sessions, the market has clocked up a 4.45 percent rise.
On the broad market, volume was a modest $29.6 million. Of the active issues, 40 advanced, 31 declined and 13 ended unchanged. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Gaspard Sebag; Editing by Dan Grebler)