Chávez threatens to nationalise food companies

[DadOf2LittleAngels]

http://www.radionetherlands.nl/news/international/5629257/Chvez-threatens-to-nationalise-food-companies
Published: Tuesday 05 February 2008 09:18 UTC
Last updated: Tuesday 05 February 2008 16:00 UTC


Caracas - Venezuelan President Hugo Chávez has threatened to nationalise the country's major food distributors if they are caught hoarding. The president warned the food industry that he was hoping they would give him an excuse to intervene.

Venezuela is facing an increasing shortage of foodstuffs which, according to the food industry, is caused by government price controls. The maximum prices imposed by Caracas are so low that supermarkets are often forced to sell products at a loss or stop selling them altogether.

However the government says the shortages are caused by ruthless capitalists who are hoarding goods in order to drive up prices. The major food distributors are also accused of smuggling their products to Colombia, where they fetch higher prices.

[jwirr]

1. Well I don't know about you but IF food becomes too expensive for

me to eat in this country I hope someone thinks of that idea here! Hunger calls for drastic measures.

[Donald Ian Rankin]

3. Yes, but measures that will improve things, not measures that will make them worse.

Threatening to nationalise food distributors will agravate the problem, because it will scare investors; they will either demand higher returns in exchange for the risk of losing their investments, or pull out. Either the price of food will rise, or it will just become unavailable.

See also this (old) article in the Guardian about the causes of food shortages in Venezuela.

http://www.guardian.co.uk/venezuela/story/0,,2210473,00.html

[jwirr]

7. I suppose you are right on that. It would probably be a better plan

to encourage more food growing in their own country.

[DadOf2LittleAngels]

9. They do grow food in their own nation

But the price at which they are allowed to sell it is so low that farmers would just as well sell it in neighboring nations..

[Freddie Stubbs]

12. This does raise the question as to why there are food shortages in Venezuela but none in the USA

[mrfrapp]

97. ...

Because the food companies in Venezuela are owned by capitalists who would rather poor people starve and Chavez be ousted from power. You don't have that problem in the USA because the capitalists and the politicians bat for the same team.

[TahitiNut]

2. It's a reasonable response to monopolistic/oligopolistic behavior.

Whenever any private enterprise attains the power of a cartel, monopoly, trust, or oligopoly, it is incumbent on a free and democratic government to remove the LICENSE of that enterprise which is then acting contrary to the public interest. The failure to act in that fashion is a betrayal of the public interest.

The sole permissible monopoly in a free and democratic society is the government itself, having a monopoly on the use of force to require compliance to the Rule of Law. Where any enterprise attains monopoly power, either through a 'natural' monopoly (e.g. water, sewers, etc.) or through the use of asymmetrical economic power to eliminate competition, it is an obligatory role of government to protect the public interest.

[DadOf2LittleAngels]

5. FYI

It was the setting of prices so low that supermarket owners were losing money that caused this problem in the first place... Moving that stupidity a link up the food chain (no pun intended) will only make it worse..

You want food back on the shelves raise the govt set price to something that supermarket owners can sell and still feed their families..

[AlphaCentauri]

68. Can supermarket owners be patriots and serve their country?

They can feed their families with the food they own.

[DadOf2LittleAngels]

77. Can the Venezulan leadership not force market owners

TO lsoe money with every sale? The low price settings are *insane*...

And guess what if I have a choice between feeding and providing for my family or being a patriot and losing everything I have Im leaving the nation. My family comes before the nation..

[AlphaCentauri]

87. it's not what the government can do for you but what you can do for your country

if you are not starving to dead, why not share some of the profits for the good of other humans, no body is dying in Venezuela of starvation.

[fascisthunter]

11. EXACTLY.... (nt)

[originalpckelly]

40. Corporations suck, but nationalizing something is like creating one BIG corporation.

All the things that suck about corporations, suck even more when there is only one and it's a monopoly.

[ben_meyers]

4. Maybe Chavez can import cheap food on his new subs. n/t

[DadOf2LittleAngels]

6. LOL!

[Dawggie]

8. Why am I thinking Dole?

[nels25]

10. At the risk of being naive

this has been tried several times and the nationalization of farming and or food production does not have a history of success.

See China from say 1949 to 1980, and of course the starvation of large numbers of soviets due to Stalin and his collective policies.

In addition I can remember about the USSR buying large amounts of grain from us in the 60's and 70's.

It just has not proven to be a prudent approach.

Still I guess we will see what happens.

:dilemma:

[On the Road]

14. You're Not Being Naive

This is not the right tack to take. If there are price controls, they have to be set high enough so as not to discourage agriculture. Sounds like that's happening. If the country needs more food, they need to increase production which may mean higher prices.

This is one reason I'm glad Chavez did not get expanded powers.

[Cessna Invesco Palin]

32. There's a difference between nationalizing the distributors...

...and enforcing collective farming, but neither has a stunning history of success. It's just that collective farming has, well, a stunning history of catastrophic failure compared to just about any other idea in the history of humankind.

Anyway, I have no idea what Chavez is thinking with this. It doesn't fix the problem - it just moves it around in the supply chain.

[AlphaCentauri]

70. He may want to eliminate the middle man like Waltmart do.

:think:

[fascisthunter]

13. GOOD! Since They Won't Sell Foods to Their Own People

starving folks for profit is sick and inhumane. Businesses should consider themselves priviledged, and not the other way around.

[Sanctified]

15. Selling at a loss means the farmer and business owner will starve.

If it costs me $1.00 to make a loaf of bread but I am only allowed to sell the loaf for $0.75 how many loafs do you think I will make.

[Judi Lynn]

18. You might consider contacting your own Congressmen about the fact this government

heavily subsidizes food production here, with crops like corn, beans, rice, etc., then floods other markets, like Mexico's with food so cheap their own farmers can't afford to grow it any longer on their own, and are bankrupted, forcing them out of farms their families have owned for generations.

Farm owners and farm workers in Mexico have been thrown out of the only sources of income they've ever had by an enormous flood of cheap US-produced, but US taxpayer subsidized crops, and they have NOTHING to fall back on.

It's been written about extensively, but it apparently doesn't seem to matter since the victims of this American economic aggression are only "foreigners."

[Sanctified]

19. I have, I am totally against subsidizing farmers especially the big corporate agro companies.

The primary reason most 3rd world nations are not able to grab a foot hold and pull themselves up is because of our farmers flooding their markets with goods cheaper than their farmers can produce.

[Rage for Order]

65. Why doesn't the Mexican gov't subsidize their farmers?

Mexico is awash in billions of dollars from record high oil prices. Why not fight fire with fire and subsidize their own farmers in the same way the US does? That seems like a more reasonable response than blaming America for Mexico's woes. Of course, the ironic part of it all is that the cheap crops that are supposedly flooding Mexico's market and ruining their farmers are being harvested by whom here in the US? That's right - Mexicans who came to the US illegally.

[AlphaCentauri]

71. If they do it, there won't be no NAFTA (nt)

[Judi Lynn]

74. Those huge crops are harvested by huge machines or didn't you know that? n/t

[Rage for Order]

79. Of course I was being somewhat facetious

However, the refrain of "without immigrant labor from Mexico and Central America, who will pick our crops?" is often heard in US illegal immigration discussions.

[Judi Lynn]

75. Huge, complex problems seem to have very simple answers with some people!

Interesting to note you've got it all figured out.

Do you think all it takes is for the Mexican government to read your post, see the light, and "subsidize their own farmers?"

Quite a few people, probably not nearly as bright as you are have toiled trying to get a handle on this!

Andean citizens’ organizations, and at leastone government ministry, have expressed alarm over the impact that a wider opening of their markets to U.S. goods might have.Many of them point to the Mexican experience under NAFTA, where there was a huge influxof lower-cost, subsidized corn imports from the United States, which put severe pressureon Mexican farmers. During the NAFTA period, Mexican agricultural employment has dropped by more than 1.3 million. The currentU.S. subsidy system leads to over-production of many crops, thus depressing world prices,something that hurts family farmers in allcountries, including the United States.
(snip)

More:
http://www.developmentgap.org/trade/Andean_FTA.pdf

~~~~~~~~~~~~~~

May 10 “Deal” Does not Alter Peru and Panama FTA NAFTA-style Agriculture Rules that Promote Hunger, Destruction of Legal Rural Livelihoods and Displacement

The Peru and Panama FTA agriculture provisions are almost identical to those in NAFTA, which resulted in the destruction of 1.3 million Mexican peasant farmers’ livelihoods and a 60 percent jump in immigration.

The agricultural provisions in both the Peru and Panama “free trade agreements” (FTA) are nearly identical to those in the North American Free Trade Agreement (NAFTA). The agreements remove tariffs on U.S. imports and forbid various price ceilings on staple foods and price floors for farmers, but do not discipline U.S. subsidies – meaning they would cause enormous distortions and disruption to the farm and food systems in Peru and Panama, where millions live as subsistence farmers. Under NAFTA, the same package of policies led to 1.3 million Mexican peasant farmers losing their livelihoods as subsidized U.S. food imports flooded the market.1While the price paid to Mexican corn farmers fell by about half following NAFTA, the deregulated retail price of tortillas shot up hundreds of percentage points over the pact’s first five years.2Mexico negotiated 10- or 15- year tariff phase-outs for staple foods (similar to Peru, which negotiated 10- to 17- year tariff phase-outs, and Panama, which negotiated 9- to 19-year phase-outs), but after NAFTA passed, U.S. agribusiness giants began pressuring for and obtained accelerated Mexican tariff cuts over three years.
(snip)

http://www.tradewatch.org/documents/Peru_Panama_AgHunger_Factsheet_Final.pdf

~~~~~~~~~~~~~~~~~

NAFTA Free Trade Myths Lead to Farm Failure in Mexico

by Laura Carlsen

...... what has happened in the Mexican countryside over
the past 14 years of NAFTA shows that free trade has been a disaster
for small farmers in Mexico.

Corn farmers forced out of business by subsidized imports from the
United States have swollen the ranks of migrants to the United States,
where many of them contribute their poorly paid labor to the same
agricultural sector that displaced them. New generations of children in
rural areas see their only future en el otro lado, on the other side,
where their fathers, mothers, uncles, or cousins earn the money they
send home that enables their families to survive.
(snip/...)

http://www.blythe-systems.com/pipermail/nytr/Week-of-Mon-20071217/073328.html

~~~~~~~~~~~~~~~~~

US Farm Subsidies Fuel Mexico Corn Crisis
27 August 2003

MEXICO'S 10,000-year heritage of corn production is being destroyed after just 10 years of rigged "free trade" rules with the United States, international agency Oxfam said today.

In a new report "Dumping Without Borders" published today, Oxfam says that Mexican corn prices are freefalling in competition from heavily subsidized US imports. Local farm incomes are slashed, resulting in rural suffering and misery from which millions of people are seeking escape.

"The Mexican corn crisis is another example of world trade rules that are rigged to help the rich and powerful, while destroying the livelihoods of millions of poor people," Oxfam Campaigns Director Phil Twyford said.

The US pays its corn farmers $10 billion a year which encourages them to produce a surplus that is then dumped onto world markets at artificially low prices. New Oxfam calculations show US corn is dumped in Mexico at between $105m and $145m a year less than the cost of production.

Oxfam says that successive Mexican governments must share blame for the worsening rural crisis after liberalizing the corn market with little regard for the impact on the lives of the country's three million corn farmers.

If the benefits of world trade are to be shared fairly—as everyone says they want to see happen—developing countries like Mexico must be allowed to protect their weaker industries. And rich countries like the US must stop subsidizing their agricultural exports.

http://www.oxfamamerica.org/newsandpublications/press_releases/archive2003/art5911.html

~~~~~~~~~~~~~~~~~
Once you start any search on this subject you will be overwhelmed with articles like this. Apparently all these people had no idea all that was needed was for the Mexican government to start subsidizing the Mexican farmers who are still left in Mexico.

Cool!

[Rage for Order]

80. Again, why not Mexican subsidies?

Why won't the Mexican gov't subsidize its own farmers? That would certainly make them more competitive with American imports and allow many farmers to continue operating. They can certainly afford it, as the state-owned oil company must be doing quite well for itself right now. In addition, with the growing use of corn for making ethanol, a new market is emerging for their product. Perhaps the Mexican Chamber of Commerce could take a proactive position and develop ethanol refineries within the country so their farmers would have additional buyers for their product. It's certainly better than doing nothing.

[AlphaCentauri]

88. Here are some answers

Mexico set to issue first biofuel permits
MEXICO: Mexico is set to issue permits to companies for the first time to produce biofuels in a bid to cut emissions from cars and boost incomes for impoverished farmers, Reuters reported, quoting a statement from the energy ministry. The ministry said the companies will be allowed to produce ethanol and biodiesel, which can be used as additives in gasoline and diesel.



Mexico is seeking to produce biofuel from alternative feedstocks, like beets, yucca root and sorghum, to differentiate from Brazil and the United States, the world's leading sugar cane and corn-based ethanol producers. The country recently passed a new law to offer unspecified support to farmers growing crops to support production of any renewable fuel.

http://www.energycurrent.com/index.php?id=3&storyid=8671

NAFTA Awakens the Ghost of Pancho Villa

Until now, the Calderon administration has remained steadfast in its stance that NAFTA will not be touched. While defending NAFTA, the Calderon administration is rolling out a rural development strategy that combines subsidies, technical assistance, yield improvement and crop substitution to create a "winning" countryside that’s firmly integrated into the global market. Far from viewing NAFTA as a drawback, the Mexican government sees the accord as an opportunity for entrepreneurial spirits to meet national and foreign demands for food and fiber. In comments to the press, federal government representatives stress how NAFTA has made Mexico the top supplier of winter fruit and vegetables to the United States.

In 2008, the Calderon administration plans to subsidize almost three million corn, bean, sugarcane and milk producers to the tune of about $2 billion. "The programs and resources are designed to benefit those who have the least, and they are for those producers with the greatest needs of support," insisted Mexican Agriculture Minister Alberto Cardenas in a statement. U.S. corn producers, who will benefit from the Mexican tariff tear-down, currently receive on average about $20,000 per grower in subsidies. Mexican farmers, whose yields are almost four times less than those of U.S. producers, each get about $770 in subsidies.

In a public relations offensive, the Calderon administration is touting its farm policies on the airwaves. On the day of the Ciudad Juarez tractorcade protest, the local affiliate of the federal government's IMER radio network aired spots that boasted of a record budget for the embattled countryside.

Some farm leaders, including members of the Mexican Council for Rural Sustainable Development and the CONSUCC organization, back the Calderon administration's free trade gambit.

CONSUCC Director Guadalupe Martinez Cruz recently defended the Calderon administration from criticisms by long-standing agricultural organizations like the CNC.

“Those of us who have memories know that they did not know how to construct a better future for Mexicans,” Martinez said, “but our organization nevertheless figures that we have to continue making a call to all the farmer organizations that are truly interested in transforming the countryside and rural families.”

http://www.newspapertree.com/features/2034-nafta-awakens-the-ghost-of-pancho-villa


---------------------------------------------------------------------------------------
As you can see they try but can't compete with the 60 billion dollar subsidized US farmers

[Judi Lynn]

89. Thanks for posting this information. Here's more from the second article:

(I'm posting a different link for the article, as the link you've got had changed by the time I got there, and wasn't responding. This one leads to the very same article.)

~snip~
Recognizing the extreme disparities in agricultural development among the three future NAFTA states, the trade accord’s negotiators gave Mexican growers of sensitive products like corn 15 years to achieve competitive status. But as the old Ford and John Deere tractors collected for the tractorcade made clear, Mexican farmers are still decades behind their counterparts in the U.S. and Canada who use the latest, costly models to work their farms. Surveying the scene, Carlos Marentes, the veteran leader of El Paso’s Border Agricultural Workers Union and the Bracero Project, said the aging tractors on display were the cream of the crop in a countryside where oxen and mules still leave grooves in the land.

“If you go deep, south in Mexico, you will see that the situation is even worse,” Marentes said. “Here we are talking about some of the ejiditarios, campesinos and producers who at least by working in the U.S. were able to make a little bit of money to buy their machinery.” Despite their efforts, Marentes contended, small farmers are still left out in the cold by agricultural policies in the three NAFTA countries that benefit “the big entities involved in large-scale, industrial, commercial agricultural production.”

Many farmers consider the Jan. 1 tariff elimination the final curtain on their livelihoods. A recent report by Ana de Ita published by the Center for International Policy’s Americas Program documented how Mexican corn farmers have been subjected to lower prices and U.S.-grown corn imports well above NAFTA quotas almost every year since the implementation of the treaty in 1994. According to de Ita, many U.S.-produced corn imports are encouraged by long-term “soft” loans from the U.S. Commodity Credit Corporation.

More:
http://www.bilaterals.org/article.php3?id_article=11025

[fascisthunter]

21. Surrrre it does.... Because the greedy don't want to take a profit hit

Profit or death. What side are you on?

So like most corporations they always find a way to pass the buck... then we hear folks like you blame it on those fighting for respect and equality and against corporate greed. It's as if you everything has to depend on the business man's profit margin... and please spare me the "It will ruin business." No it won't.

"Can't cut pricess.... because well, um... then the farmers lose too."

Well then, the company makes LESS profit and fairly charges customers as well as reward the farmers adequetly. Oh my... can't have that!

Time to deal with reality and the reality that corporations exist within social constructs dependent on their societies. Time to be a part of it, and stop claiming to be exempt from it. Welcome to a LEVEL playing field. That's a Democracy!

and THAT IS SOCIALLY RESPONSIBLE CAPITALISM.

[Sanctified]

23. What planet are you on?

If a farmer does not turn a profit he loses his land, if a business owner does not turn a profit he has to fire his employees and face losing his business. Why should the farmer or business owner lose money because the Government will not change the pricing on goods to allow them to stay in business. Even if the business owner and the farmer were to be generous and give their shit away at a loss who would feed the people next year when they are out of business?

The solution is not expecting compassion from those who will harm themselves through their compassion. The solution is quite simple, the government needs to raise the minimum price on goods to that which will allow the people to have access to goods.

[Joe Chi Minh]

25. Ther are profits and obscene profits, Mutley.

[Sanctified]

26. Agreed but this does not seem like obscene profits.

The Government has obviously set the rates below what the cost of production is.

[Donald Ian Rankin]

16. How much food are you selling to Venezuelans at a loss?

If you're not, why shouldn't you have your property confiscated? That's exactly what you're advocating doing to other people who aren't.

[fascisthunter]

17. Hey Genius... Am I a Company that Sells Food?

didn't think so.... nice try but no sale! Pretty desperate equivocating to defend their practices. Sad...

[Donald Ian Rankin]

20. That's entirely irrelevant.

Their "practices" - not selling things when they would have to make a loss doing so - don't need any defence.

Businesses do not have a moral responsibility to clear up the mess Chavez has created at their own expense, any more than you do. The government of Venezuela does, but sadly it seems to be bent on making things worse, not better.

Nationalisation of food supplies has a long and ignoble history - check out what happened when the Russians and the Chinese tried it.

[fascisthunter]

22. No... your Straw man was Irrelevent... good bye

[Rage for Order]

66. You could be a company that sells food

You should go to the grocery store, buy $200 worth of food, and then sell it to a family in Venezuela for $100. Or are you one of those "sick and inhumane" people who would allow people to starve rather than cut into your own profits?

[DadOf2LittleAngels]

24. Two sides

"starving folks for profit is sick and inhumane. "

Yes and making someone work to provide food at a net loss is slavery... We are not talking about price gouging here were talking about a farmers 11$ of labor being forcibly set at 50 cents...

[bean fidhleir]

27. Capitalists always shift focus to the farmers

They take their own profits as a given, and say that the farmers will starve if people don't pay the exorbitant prices the capitalist middlemen set. But it's the middlemen that starve the farmers in order to maximize their own profits.

If you want an egregious example, look at coffee. That's where the whole idea of the Fair Trade movement came from - stop the greedy middlemen from maximizing their own profit at the expense of the captive farmers.

[DadOf2LittleAngels]

34. So the processors and distributers

Should be doing a dollars work for 50 cents then?

[bean fidhleir]

85. So the processors and distributors should not be getting

high profits. You haven't offered any evidence at all that the middlemen are even close to being harmed, much less being forced to work for less than their costs as you -and they- evidently want everyone to believe.

As the Fair Trade movement demonstrates (http://www.deansbeans.com/coffee/fair_trade_roadmap.html),

It's important to remember that Fair Trade is an economic agreement, it's not a type of coffee. Often, the Big Boys say there's not enough Fair Trade coffee out there. To quote Ronald Reagan, "There you go again!" There's literally tons of available Fair Trade registered coffee out there. Last year less than twenty percent of the Fair Trade eligible coffee was sold that way - if nobody buys it at Fair Trade prices it gets sold as conventional. The Big Boys simply choose not to pay the price for it - then they claim it isn't available.

middlemen rarely suffer because it's not a way of life for them, as it is for the farmers. For the dealers it's only a way to make money. If they can't make money dealing food, they deal arms or healthcare or death in Iraq.

Which side are you on?

[Joe Chi Minh]

29. You are privy to the details of the costs and returns involved, are you?

Chavez is trying to rejig an evil system of vicious exploitation in short space of time.

If your claim that it is not a matter of price gouging were to prove near to the mark, then perhaps Chavez would have done better to simply nationalise the producers unconditionally, and divert more of the oil revenues to building up the agricultural infrastructure there. What problems fathomless greed poses to those rare creatures, humane leaders, after centuries of the rapine and pillage of their countries' greed-heads!

[DadOf2LittleAngels]

35. the 11$ was a typo

Should have been *1* dollar and no I dont know the exact layout but were it profitable for farmers to be selling Mils, Eggs, and Bread then they would be but the prices are held so low that there is no point for them..

"If your claim that it is not a matter of price gouging were to prove near to the mark, then perhaps Chavez would have done better to simply nationalize the producers unconditionally"

Sure worked so well for the soviets and Chinese... As another poster has pointed out its never worked in the food market..

[Joe Chi Minh]

50. Selatius seems to have the answer - more than one.

[DadOf2LittleAngels]

53. Yea I think his way is better

Price gouging laws are always good but let prices float reasonably and use national resources to help the poor

[Selatius]

28. Chavez should remove price controls and let the markets determine prices.

If prices are going too high, provide incentives to farmers to increase production at the same time as providing things like food stamps to the poor and hungry. Holding prices low artificially only leads to shortages. If government intervention is necessary, it should be in terms of combating price gouging or other abuses of the market like intentionally leaving land fallow in order to provoke an artificial shortage with high prices.

[Joe Chi Minh]

30. Excellent points. Perhaps you are right - though It's difficult to know the truth

concerning the price gouging (or not) in such situations because it is in the nature of capitalists to lie through their teeth. As its proponents on here are quick to point out, they feel no moral compunction whatsoever - although they couch it in terms of companies, rather than their good selves. Profits is profits.

Scandinavia's survival as a group of rather successful countries, with the brutal edges of their economic reforms blunted in terms of the population at large, by socially beneficial compensatory measures, is obviously a myth.

[Selatius]

36. If there is much price gouging, it's usually a sign that free market competition has broken down.

Usually, this occurs because most of the market is dominated by a few large firms, and they quickly conclude it is beneficial to profit margins to keep competition at a low level. Newcomers can be driven out simply because they may not have accumulated enough money to withstand a retaliation from the large firms when they decide to drop prices to an artificially low level to drive out the new entrant.

The solution would then be to break up the monopoly. Of course, I don't know the conditions on the ground down there. For all I know, price caps could indeed be too artificially low. Another problem is using anti-trust laws tends to be a long-term solution, while hunger is forever a short-term problem.

[Joe Chi Minh]

49. Adam Smith's jaundiced, if accurate, view of businessmen's all too natural propensity

for conspiring against the public good is a tonic to read.

[Guy Whitey Corngood]

31. I agree. n/t

[Cessna Invesco Palin]

33. He doesn't even need to remove the controls.

Most countries have some form of price control on at least basic foodstuffs. He just needs to de-stupid his price controls.

[DadOf2LittleAngels]

38. EXACTLY

[originalpckelly]

44. Price controls are an unnecessary and harmful intervention in basic supply/demand self-regulation.

As the scarcity of a good increases, so too does the price of the good, thereby causing individuals to produce more of the good. If prices float freely in a market, then the farmers and food producers will make more food as their profits rise, they will have a motive to make the food.

The solution is to get rid of corporations and return to individual profit taking on a small scale, not the elimination of the evolved behavior of self-regulating markets.

[provis99]

62. they've tried this; its called anarchism

or caveman economics.

[originalpckelly]

42. I'm glad to see someone understands the basics of supply and demand.

:P

We've seen this price control show before, and it doesn't tend to work out well. :P

[AlphaCentauri]

72. That's what the Chavez opposition wish

Run a campaign complaining of food shortages, inflation and government intervention. Q

[bean fidhleir]

86. Your scheme presumes that farmers determine final prices

The reality is that the dealer determines the price. If the farmer has a bumper crop, he gets almost nothing for it from the dealer. But the dealer doesn't pass that saving on to the end customer, he pockets it.

The late Georgi Papashvili, who immigrated from Georgia just after WW1, briefly described in Anything Can Happen his attempt to become a farmer. He and his American wife raised a beautiful crop of tomatoes - but couldn't sell them because tomatoes are perishable and the middlemen had already bought for pennies all they could wholesale to the grocers. If I recall correctly (it's been years since I read the book) there was some law that said he couldn't even take them into the city and give them away to the poor ("protecting the public", you know), so he ended up plowing them into the ground. And he quit trying to be a farmer because the experience had been so heartbreaking.

[Selatius]

90. We would have to show that farmers couldn't legally bring produce to market.

The Venezuelan countryside's economy is still largely agrarian in nature. I would think that a left winger such as Chavez would not allow such a law to be passed.

[bean fidhleir]

91. Why would it need to be so blatant? Do farmers have transport available?

Are there places they can set up stalls? Are there licenses required that are hard to get by anyone but the "right" people? Are small farmers cooperatively organized yet? Do small vendors get shaken down?

There are usually many ways to suppress actions the economic ruling class doesn't like. Witness the laws in the US criminalizing both poverty and the amelioration of poverty.

[Selatius]

95. I understand what you're saying, but it's also true the Socialists are in power down there, not here

The legislature as well as Chavez have been breaking apart large plantations in recent years because they've been attacking landless farmers and artificially restricting supply and muscling out smaller farmers.

[bean fidhleir]

96. I think it'd be more accurate to say that socialists have some of the *political* power down there

But the econ power seems to still be 100% in the hands of the venegusanos. Doesn't it?

[malaise]

37. Don't blame him

That's what the distributors used to destroy Manley in the 70s. They received big bucks from the usual suspects to starve us into submission.
The best part of it was when I traveled to another island and saw all the made in Jamaica goods in their supermarkets while we couldn't find any of it here.

[DadOf2LittleAngels]

39. Because people like to sell the fruits of their labor for a profit

The price controls are fine, the levels they are at is not..

[EFerrari]

41. Especially not to the oligarchy who had been used to stepping

on starving people to build their fortunes.

[DadOf2LittleAngels]

45. Or to supermarket owners, farmers, or employees

of groups being asked to seel a dollars worth of milk for 75 cents..

[EFerrari]

47. None of those control distribution and that's where the conflict

seems to be located.

[DadOf2LittleAngels]

51. Really

Really so you think the distributes of Venezuelan grown food don't employ people?

Or they should be forced to distribute food at a loss?

[originalpckelly]

46. You are most correct in calling the oligarchy out for what it is...

but the solution is decentralization not central planning. Individual people should be making the food. Small business should be making the food, instead of large corporations.

Central planning is inherently less efficient than just letting prices float. It requires people to work on solely adjusting the prices of goods, instead of letting the market self-regulate that. Planning means more people work to produce the same amount of goods/services.

Either a plan must be updated frequently, which saps productivity from the economy as the number of non-productive workers rises, or a plan is updated rarely, which causes these failures to supply the demand of the consumer.

[EFerrari]

48. Given the forces aligned against the government, including

BushCo, I don't believe that decentralization is feasible right now because that just sets up so many more points where the process can be sabotaged.

[malaise]

52. I'm not talking price controls

I'm talking locking up supplies in warehouses so that the government could be blamed. I'm talking orchestrated destabilization to being down a government. I lived it and I'm not guessing here.

[DadOf2LittleAngels]

55. But that is *not* what is happening here

Items that can be sold for a profit are on the shelves its only items that are under governmnet price controls that are in short supply..

[Judi Lynn]

63. What you've written here and elsewhere agrees so closely with other articles. Here's one I was glad

to find last year, from DU'er ronnie624:

VHeadline commentarist Oscar Heck writes: Just so people know what is really going on in Venezuela when it comes to scarcity of basic food products on market shelves. I am familiar with how this works because I started a small grocery store in Venezuela, one which still operates and one in which I am still involved when problems or difficulties occur. I set up its operations, its profit margins and the purchasing structure as well.

Typically, in Venezuela, and this dates from years before Chavez came into power, hoarding of basic foodstuff is a tactic used by the food mafias and monopolies to dramatically increase profits, especially in the weeks prior to Christmas.

This also applies to some non-food items, such as hardware. What typically happens is that food starts to become of short supply at the consumer end ... things begin to slowly trickle off the shelves until there is "no more" (which is usually not true). The effect is that people begin to be forced into paying much higher prices for the items (usually items of basic necessity such as chicken, meat, baby formula, flour, milk and sugar) on the "black market."

*******

With little doubt, there is also another reason why these crooks hoard basic foodstuff.... like they did in 2002 and 2003 and as they are perhaps doing now. They do it in order to cause problems so that the Chavez government can then be blamed. Almost all major producers, distributors and bigger retailers of basic foodstuff are vilely anti-Chavez ... and highly corrupt, as is intimated by the practice of hoarding.

Although it is "normal" for hoarding of food to start happening near the end of October and beginning of November ... and sometimes into late January ... it appears that the issue of the proposed Constitutional Reform, which almost all anti-Chavez people are "on principle" against, is having a strong influence on the hoarding of basic foodstuff this year ... making it perhaps worse than in other years (excluding perhaps December 2002-February 2003).

But wait ... why would these crooks be upset with Chavez, trying to cause him problems? Maybe it is because they don't want the proposed changes to Article 113 to become law? Article 113 will make monopolies illegal, thus making hoarding more difficult.
<http://www.vheadline.com/readnews.asp?id=76795 >

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3062855&mesg_id=3064146

[Judi Lynn]

64. Important point raised in DU'er ronnie624's article: they know Chavez intends, if possible,

to see monopolies made illegal.

Such a great article: really needs to be studied. Thanks to ronnie624.

[NuttyFluffers]

81. Article 113? you mean Venezuela doesn't have anti-trust powers like we do?

smashing monopolies is a crucial capacity of sovereignty to retain sustainability. apparently Venezuela does not seem to have this sort of national power -- or its terribly atrophied -- and "black markets" and hoarding are a current reailty as a result. no wonder Chavez wants to nationalize. until he gets some sovereign power to break up destabilizing monopolies anything that stops the corporate destabilization is crucial for national survival.

what a nasty Catch-22 for Venezuela and Chavez!

[Judi Lynn]

82. Found a link concerning early discussions they were holding on the subject:

(I had a hard time grasping what this article is saying. Maybe it's too late at night, or more likely, I'm not up to the challenge!)

Recommendations on the Antitrust Bill

Under CONAPRI’s institutional cooperation agreement with the National Assembly, its Legal Committee has submitted some suggestions, of both form and substance, regarding this bill, which has already been approved following its first debate.

Author: Eleazar Santos

Caracas, May 24, 2005. - The proposed Antitrust, Anti-oligopoly and Unfair Competition Law will regulate the dynamics of the Venezuelan economy by typifying and formally establishing sanctions for the crimes of usury, cartelization, hoarding, monopoly, and oligopoly. This bill is being submitted to a process of public consultation in order to fine-tune it before it is finally approved following its second debate in parliament, to be held shortly.

A number of social players, from the business sector to academia, have already submitted their proposals. The Legal Committee of the Venezuelan Council for Investment Promotion (CONAPRI) also presented its opinions and recommendations with regard to this bill.

On Tuesday, May 2, CONAPRI and the National Assembly held a joint session to explore the private sector’s views. The meeting was headed up by the chairman of the Permanent Economic Development Committee, Ricardo Gutiérrez, accompanied by Deputies Erick Rodríguez, Hiroshima Bravo, and Efraín Contreras.

Also present were representatives of CONAPRI’s member companies as well as members of Cavidea (Venezuelan Food Industry Chamber), VenAmCham (Venezuelan-American Chamber of Commerce and Industry), the Banking Association of Venezuela, Consecomercio (National Council of Commerce), Conindustria (Venezuelan Confederation of industrialists), and other organizations, who submitted their observations regarding the bill.

References in the Constitution

CONAPRI’s Legal Manager, Eduardo Porcarelli, presented to Parliament a series of key recommendations regarding the Antitrust Bill that were the outcome of a consensus reached by the Committee. The first issue he addressed was the exclusion of state-owned enterprises from the application of the law (Article 5), which could affect private companies’ access to and participation in the market on equal terms.

“Articles 113 and 299 of the Constitution make no distinction between public and private when proscribing practices such as monopoly and protecting free competition. This exception produces a rupture in the principle of equality among competitors in the market, which could affect the interests of users and consumers, not to mention those of small enterprises and cooperatives, which are given special protection under the very same law,” explained Porcarelli.

On this issue, he recommended restricting the possibility of exclusion solely to sectors affected with national interest established as such by a special law, pursuant to Article 302 of the Constitution. This same article (Article 7) looks as though it will also be used as a reference for the State to declare concessions of exclusivity in order to avoid monopolies. “Legal monopolies are entities of an exceptional nature, and this should be maintained so as to protect all agents in the market,” he commented.

More:
http://www.conapri.org/English/ArticleDetailIV.asp?articleid=240860&CategoryId2=16036

~~~~~~~~~~~~~~~~
Found an interesting "open letter" to Hugo Chavez:

Monopoly In Venezuela

--------------------------------------------------------------------------------

To: antimonopoly@xxxxxxxxxxx
Subject: Monopoly In Venezuela
From: Charles Mueller <cmueller@xxxxxxxxxxxxx>
Date: Tue, 08 Dec 1998 19:49:40 -0500

--------------------------------------------------------------------------------

An issue that strikes me as especially important is one posed by the
recent election results in Venezuela--the victory of Hugo Chavez, described
in the press as a charismatic leader of the left who had previously led a
violent coup attempt and has ideological and other connections with Cuba's
dictator, Castro.

We have here a situation that deserves, in my view, a great deal of study
and thought by those who're concerned with the welfare of the world's 6
billion citizens. Venezuela is a very rich nation--thanks to having the
largest oil reserves of any country outside the Middle East. Yet some 78%
of its 22 million citizens live in poverty. How to square this figure with
the country's relatively high per-capita GDP of some $8,000--more than 10
times that of the poorest of the planet's nations, e.g., $300 or so in
Ethiopia and Haiti? Remember that story in statistics class about all
those drownings in a river whose 'average' depth was 3 inches? All that
oil wealth flows into the bank accounts of Venezuela's political and
economic elite--in economic terms, its monopolists--and the citizenry at
large teeters on the thin edge of starvation.

Monopoly is, as I've pointed out no small number of times, systematic
theft. And repeated, endemic theft--once publicly identified--tends to
generate a potent political response unless suppressed by a police state.
A nation like Venezuela--one looted decade after decade by a group of
corruptly-maintained monopolies--will routinely give birth to a
'revolutionary' personality of one sort or another, a leader who promises
to change the monopolisitc 'system.'

Global poverty in 1998 is tied to the reigning definition of
'revolutionary.' The world's 200 countries tend to oscillate between 2
political/economic extremes. Corrupt private monopolies--as in
Venezuela--routinely generate a 'revolution,' which unfortunately tends to
be of the Marxist variety, a la Fidel Castro in Cuba. These Marxist
monopolies, alas, tend to further impoverish the already poor citizenry--as
the tragic historic of the Marxist experiment worldwide from 1917 to date
so poignantly illustres. So the 'revolution' fails--the poor are poorer
still--and a Fascist 'strongman' then arises to fix it, his solution being
a return to 'private' (corrupt) monopolies.

Deja vu all over again. Private monopoly, public disgust. Public
monopoly, public disgust. Back and forth, the swinging goes on, endlessly,
spanning decades and centuries in, for example, virtually the whole of
Latin America. No recognition, though, that the common element in the
individual nation's problem--under both the Marxist and the private
monopoly/corruption--is economic monopoly.

Hugo Chavez of Venezuela now has 3 key policy choices: (1) Go with
Fidel's public-monopoly model (Marxist ownership of everything worth owning
in the country) ; (2) give his blessing to the Friedmanite model of private
(corrupt) monopoly that currently impoverishs his people; or (3) take on
the tough job of leading his country into a genuinely competitive
free-enterprise economy, one with NEITHER public nor private
monopolies--thus enriching all of his citizens and vastly reducing the
present inequalities that so profoundly disturb his society.

Suppose Hugo Chavez should ask us for our economic advice: How to make
his country, Venezuela, prosperous for all its citizens? What would we
tell him? Me? My advice would be, Kill your monopolies.

Charles

http://archives.econ.utah.edu/archives/pkt/1998m12-b/msg00023.htm

(Might mention this was written in the month in which Chavez was elected. He was not inaugurated until February 2, 1999, so the author hadn't had time to see which way the guy would be going.)

[NuttyFluffers]

83. wait! this was the constitutional referendum of last year, right? the one that failed?

it's late and i'm sleepy, but that's what i'm getting right now.

if this is the constitutional referendum that failed last time that means they are still working with the 1999 constitution. which means they don't have the current protections against oligarchy, hoarding, black markets, monopoly, etc. which we in the USA currently take for granted! oooooh! either that or my sleepiness is getting the better of me.

so is Chavez trying to do an end run around a failed referendum to change the constitution to actually bring real sovereignty to Venezuela? and were cartel and monopolies more vigorously opposed to the constitutional reforms because of these critical empowerments to the gov't? and are these same cartels and monopolies utilizing their currently safe entrenched place to destabilize Venezuela and reconquer it through a velvet gloved revolution? Diplomacy, Deceit, Destruction... it's the most interesting game in town!

what will happen next as we watch "As the World Turns".

this is great stuff! people should really open this up and explore here. unless i'm seeing things all crosseyed, this is the active display of power politics at work! a wonderful civics lesson on playing the victim to discredit your enemy and economic subjugation!

[Judi Lynn]

84. I think that first one was from the run up to the referendum, when they were taking the items around

all over the country, and discussing them with groups everywhere, in schools, in community groups, etc.

They were doing this for months, involving THOUSANDS of government spokesmen meeting with the citizens, getting feedback, etc., whenever and wherever possible.

Yep, that was from BEFORE the referendum, and they are still working with the other one.

On edit:

The oligarchy is NOT ever going to give up in its war against Chavez, and it has always had the full force of the _Bush regime on its side, coaching, kicking in taxpayers' hard earned tax dollars to their organizations, even flying key oligarchists to Washington to meet with the State Department, as if THEY were the heads of the Venezuelan government. God, they are all simply filthy people.

[Occam Bandage]

43. Ah, yes, nationalization of food production and price controls. Those are always effective. Always.

[JosephSchmo]

54. Price controls don't work. Nationalization won't work either.

Some people just can't learn.

[Cleita]

56. Nationalization isn't all the evil the corporate brainwashers of

America would like you to believe. In a country like Venezuela where free market means the rich get richer and the poor stay poor, it could be a temporary solution until they get their shit together.

Something that Americans don't realize is that our food supply is very manipulated by the government with what amounts to government welfare and restrictions to the big farming conglomerates to keep our food supply plentiful and cheap, or it used to be in the past.

[DadOf2LittleAngels]

57. No it wont work

"In a country like Venezuela where free market means the rich get richer and the poor stay poor, it could be a temporary solution until they get their shit together."

Reasonable price controls and better taxation of the rich can take care of this nationalization will only lead to a smaller supply of goods and in the end hurt the poor.. If not for the Oil Wealth of Venezuela their economy would have already completely collapsed under the weight of Hugo..

[Cleita]

58. Speculation.

South America is very complicated and can't be painted with the same brush we use for ourselves.

[DadOf2LittleAngels]

59. Right because were so simple..

As are the Chinese, Russians, the People of Zimbabwe, and everywhere else that nationalization of the food supply has been attempted *and failed*

[Cleita]

60. Why did it fail?

Could it be because the governments were totalitarian dictatorships?

[DadOf2LittleAngels]

93. Which Venezuela is moving very quickly towards

Oil, Media, now food...

[Cleita]

94. Chavez is elected in elections that appear to be more honest

than ours. Never lose sight of that fact. If he screws up, he will be booted out in the next elections providing our country doesn't butt in like they did in Chile with horrid results. Also, his people voted for term limits, which he accepted, so Chavez it appears is not the demon dictator that American propagandists like to paint him as. Some of his solutions seem extreme and they may bomb for him, but this is a country that has been run by a very fascist and extreme elite for so long, it might take some drastic solutions to make permanent change. I'm originally from Chile so I know that trying to impose solutions in South America colored from our American experience is bound to fail. We need to leave them alone to find their way.

[AlphaCentauri]

73. Agree many think latin america function the same way a consumerism society does.

[Judi Lynn]

76. Ha! I've noticed that, myself! They seem to imagine the whole world is just like their neighborhoods

It's absolutely impossible trying to prompt them to start reading, finding out what they don't know.

Life can easily be understood by listening to tv news, in their world. No reading needed. Ever. No THINKING, STUDYING, EVER, NO, NOT ONCE. Really, REALLY sad.

If you don't know it already, it's not all that important, apparently. Just find out what the right-wing-controlled media will say about it.

[Disturbed]

61. "The solution is quite simple,"

No it is not! Do I have the solution? No, I don't. I don't have the knowledge to offer a solution.
I hope Chavez consults with people that can offer solutions that will be more successful than
the one he is threatening.

[treestar]

67. Why that fascist, totalitarian dictator

What will he think of next?

:sarcasm:

[Rage for Order]

69. You're exactly right

In order to set a good example, if it costs Venezuela $60 to produce a barrel of oil, Chavez should sell it to the world at $50 a barrel! Price controls, you know.

[Ikonoklast]

78. Buy crummy Russian submarines instead

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2820537


I'm certain that will help feed the hungry in Venezuala.....

[conspirator]

92. 2 WORDS: VIVA CHAVEZ. No corporate abuse with him n/t