BUENOS AIRES – Argentina's embattled President Cristina Fernandez replaced her cabinet chief on Wednesday after suffering a crushing defeat last week over farm policy.

Sergio Massa, mayor of a Buenos Aires suburb and former head of social security told a local radio station he had been offered the job of outgoing Cabinet chief Alberto Fernandez, a powerful member of the president's inner circle.

President Fernandez has been in office only seven months, but her popularity has fallen steeply as she fought with farmers who opposed her decision to increase export taxes on soy, the country's main crop.

The battle has grown into Argentina's biggest crisis since an economic meltdown early this decade.

Opposition leaders and some top members of the president's party, the Peronists, had urged her to reshuffle the cabinet and adjust her policies after a Senate vote forced the president to ditch her controversial tax.

Massa served four years in the social security administration under President Fernandez's husband and predecessor, former President Nestor Kirchner, from whom she inherited most of her cabinet.

Fernandez and Kirchner, often called the presidential couple in the press, concentrate decision making in a tight circle of advisers.

During the battle with farmers, Cristina Fernandez stood firm in what was seen as a continuation of her husband's uncompromising political style.

But her strategy failed as farmers mobilized hundreds of thousands of anti-government protesters to anti-tax rallies while lobbying Congress.

Argentina is one of the world's biggest agriculture producers and half of its exports come from farms. But the country is split on how to distribute windfall profit from high-priced products such as soy.

When she took office, President Fernandez could count on 48 of 72 senators to back her. However last week, 11 Peronist senators voted against the grains and oilseed exports tax, forcing her to revoke it.

Agriculture Secretary Javier De Urquiza was the first high-level official to lose his job after the Senate vote.

Carlos Cheppi, who had been president of the National Agricultural and Livestock Technology Institute, was sworn in to replace him Wednesday.

De Urquiza, a sheep farmer from Patagonia, took over as the center-left government's agriculture chief in February 2007, when relations between officials and farm leaders were already strained over anti-inflation policies, such as export curbs and price controls.

Some media reported that the entire cabinet was offering to resign to allow the president to reshape her government.

In a tight-lipped administration – the president has never given a news conference – Alberto Fernandez was the closest the Kirchners had to a spokesman, appearing often on radio programs where he lashed out at the president's critics.

(Additional reporting by Lucas Bergman, editing by Alan Elsner)