Hugo Chavez, president of Venezuela, has turned efficient big farming into peasant-owned disastrous farming. Food shortages couldn’t come at a better time for possibly convincing voters to throw the socialist/communist out of office.
I remember attending international agricultural investment conferences where large farmers in Venezuela were trying to figure out how to get their money out of the country for investment in U.S. farmland or other South American countries. All the Venezuelan government rules and regulations on sale of grains, both processed and unprocessed grains, plus set prices for staples such as milk, sugar and corn meal, have been taking their toll on ag production. And of major significance in reducing the production of food is the taking of farmland from large land owners and allowing peasants to claim small plots of land for themselves. Food shortages have become common, much like the population of the Soviet Union endured for years.
A report in USA Today by Peter Wilson, pointed out that the government bureaucracy has tied up every aspect of free enterprise. “The artificial ceiling on [food] prices though, as farming expenses rise, has prompted farmers to leave their fields fallow,” Wilson wrote.
The report is that since 2007, grain production is drastically lower and fluid milk supply has dropped by as much as 70 percent because of the government ceiling on what can be charged for milk. Forced low prices means farmers who could gear up to produce milk aren’t doing it.
Wilson quoted Carlos Machado Allison, an agriculture professor at the Caracas IESA graduate school, in telling the history of how peasants were encouraged to seize large landowners holdings of land, but those peasants have no way to borrow money to plant crops and they have no supplies of seeds, fertilizers or pesticides.
The government even took over ag retail operations and has destroyed a consistent pipeline of crop inputs. Wilson wrote, “The country’s largest privately owned farm supply store, Agro Patria, was taken over two years ago by the government—its managers replaced with inexperienced political supporters of Chavez. The store went from a profitable operation to suffering frequent supply shortages.”
Venezuela has the highest inflation rate in all of North, Central and South America at 25 percent, and with financial problems such as that, the government isn’t capable of taxing the efficient farming operations, still in place, to have money to provide peasant land-grabbers with free seed and fertilizer.
It is no wonder that previously successful agricultural producers with knowledge of how to efficiently grow a crop or livestock have been looking for ways to jump the border out of Venzuela with as much money and assets as possible.
It is a wonder why the under-fed Venezuelan people would re-elect Chavez to his fourth term in office on Oct. 7.