Food shortages threaten Venezuelas socialist project

Venezuela’s government has moved into high gear as it attempts to shore up food availability. Shortages have mounted even though food production has increased over the past three years and food purchases are subsidized through 14,000 state-run Mercal food stores. They were a factor in the defeat the government experienced in the Dec. 2 vote on constitutional reform proposals.

President Hugo Chávez has hammered away on food sustainability during recent weekly Alo Presidente broadcasts over television and radio. “The government has begun the year determined to keep increasing food production,” he said on Feb. 10. “We have a really high budget in order to put the agricultural infrastructure in optimum condition. We have a lot of work to do.”

As his helicopter swept over open savannas in the rice producing Barinas area, Chávez inveighed against idle land visible below. At a rice processing facility he announced a 44 percent increase in previously controlled rice prices. Promising increased milk production, Chávez announced that $500 million had been set aside to develop the dairy industry.

Milk shortages have been painful. Chávez designated the smuggling of milk into Colombia for cheese production as “treason.” His government has been importing cattle from Argentina.

Government spokespersons say the problem stems from producers withholding food from markets and distributors hoarding, smuggling and speculating on food. Some 25,000 tons of food products headed for Colombia, where 300 profits are routine, have recently been confiscated. Chávez Feb. 7 beefed up government powers to prosecute offenders and even expropriate their companies.

Among background factors are Venezuela’s continuing need to import 70 percent of its food, and chronic underdevelopment of rural areas (where only 12 percent of the population live). Inflation rose 22 percent last year, elevating prices for all goods including food, which rose 32 percent overall. As incomes have risen, consumption is outstripping supply. Corruption afflicting the Mercal system, and lagging land reform, have also contributed. At the same time, world food prices have skyrocketed due to droughts, diversion of grains to biofuels, and high energy costs.

Venezuela’s private media thrives on difficulties posed by food shortages. Polls before the referendum indicated that through media hype, the public focused discontent on the government rather than on agribusiness and supermarket owners. Anxieties fueled by media stories caused buyers to exhaust stocks in food stores.

In response, the government eased import restrictions on 50 products, banned corn exports, increased prices for ten basic foods, authorized $10 billion in low cost loans to producers and suppliers, prepared to increase dairy imports from Argentina, added 40 percent to payments received by domestic milk producers, dedicated $4.4 million to 21 community-run agro-industrial complexes, and diverted $326 million to support PDVAL, a new government-operated food distribution network complementing the Mercal system. Venezuela’s rise in food consumption from 168 Kg per capita in 1998 to 188 Kg per capita today testifies to past successes in striving for food sufficiency.

Yet Chile’s example suggests the stakes are high for a revolutionary government. The Venezuelan Information Office suggested at the time that the U.S. “campaign of disinformation and financial support” for coup plotters in April 2002 was “eerily reminiscent of U.S. involvement in the coup in Chile 30 years ago.”

In 1970, the CIA operated on orders to “make the economy scream” in Chile. Declassified intelligence documents released by the National Security Archives in Washington show the U.S. government mobilized its overseas agencies to create widespread hardship within Chile and encouraged domestic media there to feature reports of suffering and desperation.

A prime U.S. objective in such situations, according to John Perkins (Confessions of an Economic Hitman), was to persuade entrepreneurs to carry out economic sabotage disguised as free enterprise.

Venezuela’s socialist government faces special challenges. According to recent visitor Fred Magdoff, writing for MRzine, “Something is being attempted in Venezuela that has no precedent in human history — building socialism from the bottom up in the midst of a capitalist society in a manner that is profoundly democratic (as well as chaotic).”

Analyst Frederico Fuentes, also writing for MRzine, suggests that with elections later this year for governors and mayors, ending food shortages “is essential for the survival of the government.”

atwhit@road runner.com