Venezuela’s President Maduro Assures Food Shortages Are Due to “Economic Warfare”
Venezuela’s President Maduro Assures Food Shortages Are Due to “Economic Warfare”
By Chris Carlson
Punto Fijo, May 12th, 2013 (Venezuelanalysis.com) – During a speech on Saturday, Venezuelan President Nicolas Maduro blamed food shortages on an “economic war” from the Venezuelan private sector, and assured the government is taking measures to resolve the issue.
Shortages of basic food items have been felt across the country in recent months, with Venezuela’s Central Bank reporting for the month of April the highest level of shortages since 2009.
Economists cite a lack of foreign exchange, price controls, and a fiscal deficit as the primary causes for the shortages, while the government cites high levels of consumption and economic sabotage from Venezuela’s private sector.
“We have many indicators that (Venezuela’s largest food company) Polar has been reducing their production and hoarding products in order to create scarcity,” said Maduro on Saturday.
Maduro demanded to know why the company has been reducing their production and publically called on the owner of the company, Lorenzo Mendoza, to a meet with him on Tuesday to explain the situation.
“He has to demonstrate that they are producing in line with the law and the constitution, because otherwise we will take firm action,” he said.
The government has sought to resolve some shortages by increasing food imports from Mercosur countries like Brazil.
Food Minister Felix Osorio assured on Saturday that Venezuela would be financing the import of 700,000 tons of food from Mercosur countries in the coming days.
President Maduro’s recent visit to several Mercosur countries included the signing of several agreements to import food from within the trade block, as well as to acquire aid in improving Venezuela’s domestic production.
“Our goal is to produce the food that we consume and transform Venezuela into an exporting powerhouse. To do that we are going to try new models and methods of production with the help of Brazil,” said Maduro while in Brazil on Thursday.
Maduro announced that Brazil would help Venezuela set up various food and fertilizer plants in Venezuela, but in the short term Venezuela will import a greater amount of food from its southern neighbor.
Opposition representatives assure the shortages are due to a lack of foreign exchange, a product of excessive spending in 2012 that left the government without enough dollars to meet the growing demand for imports.
But the government claims that the dollars that are approved for food imports are being stolen by private sector speculation.
“The government has to be very careful and evaluate how many millions of dollars are being given to the private sector to import food because we are confronting an economic war,” said Maduro.
“It is painful to give the country’s foreign exchange to a group of shameless companies that steal people’s money,” he said.
Government officials said that there would be dialogue with the Venezuelan private sector in order to combat the problem.
Representatives from the private sector point to government price controls and the bureaucracy that surrounds currency exchange controls as the root of the problem.
The government has said it is working to speed up the process for companies to access the foreign exchange they need to import goods.
“We are going to discuss the problem of foreign exchange and price controls this week and we hope to give a report to President Maduro on the measures needed to resolve this problem,” said Food Minister Felix Osorio.
The Venezuelan government maintains price controls on a range of basic goods in order to assure the poorest sectors can afford them.
Many of these prices have not been adjusted for more than a year, creating complaints from the private sector that claim it is increasingly unfeasible to produce the regulated goods.
The price controls in Venezuela also have created a problem of smuggling food into neighboring Colombia where it can fetch higher prices.
Minister Osorio assured, however, that the problem would be solved in the coming months.
“We will be resolving the problem in less than 60 days. A dialogue has been opened with the private sector,” he said.
Published on May 12th 2013 at 11.09pm
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http://venezuelanalysis.com/news/9236
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Speculation and manipulation of food prices have been used as weapons of the economic warfare for a long time in Latin America.
Remember that Goulart's speech I posted?
"Repressive actions, people from Rio, are those already practiced by the government, and they will be implacably increased, more and more, in Guanabara and in other states, against those speculating with the difficulties of the people, against those exploring the people, those misappropriating and playing with the prices of food."
http://www.democraticunderground.com/110816077
Almost half a century later, the weapon of the right wing against the government is the price of the tomato. They are blaming Dilma for it (nevermind the fact that there has been a global shortage of tomato since 2012)...
They tried the same thing with Peron and he had to implement controls on the prices of food too. It's a well known tactic, when you can't beat 'em, try to starve them into submission and blame it on the Left.
The good news is that this only breathes more life into the War on Latifundio
Even here, we had to fight that war when speculators were trying to bleed the people dry.
And none of this is new.
In 2010, Chavez threatened to take Polar over for food hoarding.
Food hoarding
Trade minister Richard Canan reported on May 24 that the largest private food company, Empresas Polar, was found hoarding 114 tonnes of food at a warehouse in Barquisimento, a city in the state of Lara, to sell on the black market above price controls. To boost the price on the black market, Polar published a deceptive notice naming 260 small food shops which it claimed had a shortage of those foods hoarded by Polar. The government has expropriated the hoarded food and distributed it at the fixed price. Canan also announced that a ministry-organised raid on May 24 had discovered 2600 tonnes of food hoarded in the state of Bolivar.
To counteract the artificial food shortages created by capitalist hoarding, 113 extra public markets were set up on May 25 by the government across 11 states through the social mission Mercal and distributed 452 tonnes of food at prices 40% below regulations. Using his Twitter account on May 9, Chavez announced that by mid-June every Cada supermarket, previously privately owned, would become a part of the government-run Gran Abasto Exito stores, “to continue fighting speculation”. To combat inflation, the Chavez government is progressively nationalising the major distribution hubs of the economy at the same time as nationalising foreign trade. The recently nationalised Exitos and Cada supermarkets form a part of the Corporation of Socialist Markets (Comerso). The Comerso network will allow the government to import goods at the official exchange rate and sell at a lower price, as well as distribute local produce at official low prices, making goods more affordable for working people.
...
http://directaction.org.au/issue23/venezuelan_revolutionary_battle_with_inflation_escalates
Tonnes of maize flour hoarded by Polar
Venezuelan Government Meets with Private Industries to Combat Food Shortages
By Tamara Pearson
Merida, January 9th 2013 (Venezuelanalysis.com) – Following a situation of some minor food shortages, combined with a private media campaign to present the situation as more serious, Venezuelan government representatives have met with private producers in order to resolve the situation.
Sugar and flour shortages
In Merida city, sugar has been completely unavailable for the last two months, while pre-cooked corn flour, used for Venezuela’s arepas, has only been available sometimes.
Other staples, regulated foods, and commercial foods have been readily and easily available, and the situation is similar in the rest of the country. Most private businesses did take advantage of the end of year holiday period to put food prices up by as much as 10% to 40%.
Some private Venezuelan and overseas media however have made the situation out to be worse than what it is, and have blamed the government. Rightwing Venezuelan newspaper, Tal Cual, claimed today that, “(food scarcity) is the government’s responsibility, the state can’t sustain the amount of imports because of the scarcity of foreign currency. Policies of expropriation and excessive control don’t allow for increasing internal production”.
Inspections and confiscations
On Monday, the minister for justice, Nestor Reverol, said 9,000 tonnes of refined sugar that were being hoarded in storehouses in the industrial area of La Victoria, Aragua state, were confiscated. Reverol explained that the raid of the warehouse was thanks to reports from the community.
On Saturday vice-president Nicolas Maduro also said that the government had conducted an inspection of one of Polar’s storehouses in Caracas and found 490 tonnes of pre-cooked corn flour. Polar is the biggest private producer of food supplies in Venezuela.
The discoveries of hoarded goods form part of the government’s current National Plan of Inspection and Auditing that it is carrying out on commercial establishments.
Last month the government, through its goods and services monitoring institute, Indepabis, carried out 1,542 inspections, which resulted in 212 fines and 47 closures of premises, for violating rules.
“Look at the little campaign that some media have waged recently, saying that there’s not enough sugar, flour, rice. Why do they do it? In order to create a feeling of nervousness that something is going to happen,” Maduro said.
Agreements with private businesses
Yesterday the national government also held a range of meetings with large scale producers of pre-cooked corn flour, wheat, cooking oil, and meat. They agreed to supply the different distribution points in the country, food minister Carlos Osorio told press.
He said the agreement aimed to prevent products from being hoarded, then sold on the informal market above regulated prices. Maduro added that the meetings also aimed to verify available food supplies, in order to intensify measures against hoarding.
The minister for agriculture and land, Juan Loyo, said that that the meetings will continue next week in order to analyse issues such as prices, a livestock plan, and importation proportions.
Maduro said that the government’s strategy in dealing with hoarding was to go “with the law in our hands”, to the food companies and verify their inventories.
“And there’s another way of acting: Once the crime of hoarding is proven, with popular (people’s organisations) intelligence, with an investigation, then we go, with the law...and with the National Guard, to open the warehouses and to bring out the hoarders in handcuffs, to put them in prison for committing this crime against the people,” Maduro said.
“At the moment we have three months worth of guaranteed food reserves for our country...but the consciousness of people is important, we shouldn’t let them make us go crazy, we shouldn’t go out and buy four packets of each item, every time they tell us that there isn’t any,” the vice-president concluded.
Following the meetings, Polar owner Manuel Larrazal also told the press that his company has “enough primary material to guarantee and to continue producing at full capacity”.
Representative of the private red meat sector, Gonzalo Azuaje also said there was a “full supply” of meat nationally. “We guarantee the supply of this product, which is so important to the Venezuelan diet,” he said.
Food production up and other government measures
On Sunday Loyo told AVN that in 2012 the proportion of Venezuela’s food produced within the country reached 71%. He said the main imported foods were wheat flour and soya flour.
“We ended the year with some good achievements in terms of growth in cereals, especially rice and white corn. [Production of] these two products grew by 7%,” Loyo said.
Local production of red meat was 65% last year, and chicken was 100%, though Loyo said that there was a “deficit in November and December as the national producers had said in August they had full production possibilities but then had problems with chicken feed. This problem was solved with the necessary imports”.
Total food consumption in 2012 was 26,848,477 metric tonnes, a 94.8% increase from 2003.
The Venezuelan government created the subsidised food program, Mercal, in 2003, to combat hoarding and price speculation following such measures by food producers and retailers in the aftermath of the 2002 oil strike.
Later, through state oil company PDVSA, the government also created PDVAL for a similar purpose, and has also nationalised a range of food companies, expropriated fertile but unused land, created the Agro Venezuela mission to try to increase local production, and created the Bicentenario super market chains.
The budget for this year passed by the national assembly at the end of last year also increased funding to these sorts of food programs by 41% from 2012. Also, in 2011 the assembly passed the Law of Fair Prices, enabling the government to put price caps on certain goods and to apply penalties for price speculation.
Published on Jan 9th 2013 at 9.09pm
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http://venezuelanalysis.com/news/7598