MANAGUA, Jan 13 (Reuters) - More than 160 Nicaraguan farmers were arrested when they blocked a key highway and clashed with police in a protest to demand that Congress pass a law to ease their debts, police said on Tuesday.

About 2,000 growers from northern Nicaragua blocked a section of the Pan-American Highway about 35 km (22 miles) from the capital of Managua late on Monday .

Police spokeswoman Vilma Reyes said 167 people were arrested. Two police and one of the farmers were injured in the clashes before police reopened the highway, she said.

The farmers arrived in Managua on Monday to pressure lawmakers to back a proposal they presented to Congress late in 2008 that would allow them to temporarily suspend debt payments. They argue that the interest rates they are being charged by small lending firms are too high.

The farmers' proposals have not been supported by either President Daniel Ortega's left-wing Sandinista party or right-wing leaders, who are locked in a fight over local elections that opposition parties say were rigged. (Reporting by Ivan Castro; editing by Mohammad Zargham)

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