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Venezuela responds to world food crisis

March 18, 2008

By Suzanne Weiss and John Riddell. Suzanne and John are members of the Venezuela We Are With You Coalition. The following are major portions of a presentation they made to members of the National Farmers Union in Grey County, Ontario, March 10, 2007.

The people of Venezuela are today campaigning to rebuild a devastated family farm economy. They have more problems than solutions, but still are making significant progress.

Venezuela is an oil-rich country. But that doesn’t mean that Venezuelans are rich: in poor countries, oil brings misfortune. The so-called free market ensured that oil exports were balanced by a flood of cheap imports that stunted Venezuelan manufacturing and devastated its agriculture.

So despite the oil, Venezuela remained poor – its income per person is about one-fifth of Canada’s. And a rich minority gets most of it; 65% live in desperate poverty. Over half, unable to get jobs, scrape by in what is called the “informal economy.”

For ‘holistic rural development’

When Hugo Chávez was elected as Venezuela’s president in 1998, only a fraction of Venezuela’s once flourishing farming sector was left. There were fewer than 300,000 farm families, and many of them were doing little farming. Much of its richest farmland was no longer utilized. Much was being held idle in huge estates. Agriculture made up only 6% of national production – extremely low for a country so rich in farming potential and so poor in industrial development. Three-quarters of Venezuela’s food was imported.

Soon after the election, the Venezuelan people adopted a new constitution that addressed this problem in terms not just of raising farm production but of rebuilding rural communities. It declares:

“The state will promote conditions for holistic rural development guaranteeing the farming population an adequate level of wellbeing, as well as their incorporation into national development.”

The government stated in 2004 that farming is “the basic foundation for the preservation of a culture” and of “a way of life.” (“ALBA and Food Security,” Bancoex, February 5)

It is government policy to promote family farming as the best way to achieve this cultural goal and as the most efficient form of agriculture.

In Venezuela, 5% of landowners hold three-quarters of the land. The constitution deplores this situation, declaring that “the predominance of large estates is contrary to the national interest.” President Chávez explains this with a biblical quotation from the prophet Isaiah: “Woe unto them that join house to house, that lay field to field, tell there be no room, and ye be made to dwell alone in the midst of the land.”

As Venezuela sees it, reliance on food imports endangers the security of its food supply.

Venezuelan farmers cannot compete with highly subsidized U.S. exports, and with the big lead that U.S. agriculture has developed in technology and infrastructure, but attempts to protect producers are denounced as attacks on “free trade.”

Meanwhile, the predatory tactics of a handful of corporate giants are making farmers “more and more dependent on the purchase of expensive inputs of transnational companies.” (Bancoex)

Land reform

The heart of Venezuela’s agricultural program is a land reform that aims to distribute idle land to small farmers or farming cooperatives, using both state-owned land and expropriated portions of private estates with compensation.

The reform is moderate, leaving untouched large estates that are in production. Yet it has led to a wave of violence in the countryside. Assassins in the pay of large landowners have killed almost 200 farm activists. The reform has also met with obstruction from government bureaucrats, judges, and police.

Farmers, who face lawless, chaotic conditions in the countryside, receive weak legal and police support. Infrastructure is lacking – for example, the rural road system is very poor, so it is hard to market products. State officials appointed under the old regime are often unhelpful.

Nonetheless, by 2004, 125,000 families had received inalienable title to four million acres – often land they were already cultivating – and there’s been much progress since.

Many of the new farms are independent family enterprises; others are cooperatives, and there’s a full-time training program for those who are joining or forming new co-ops. Producer co-ops are mostly small and often family-based. There are also co-ops that process or transport food.

Close to $1 billion a year has been invested in agricultural development. Low-interest loans have been provided to small farmers. And food production has increased in each of the last three years – 12% in all.

Meanwhile, the government has moved to counter hunger among the poor. It slapped price controls on basic foods. A new network of 14,000 state-run groceries stores, called Mercal, provides cut-rate food in poor districts, and another network of 6,000 community-run kitchens, using donated space and labour, provides free meals each day to a million of Venezuela’s neediest.

A visit with Venezuelan farmers

While we were in Venezuela in November and December, we met residents of the town of Libertador, in the state of Caribobo, who had taken up farming on idle land.

We met Maria Morillo, president of a communal government formed by about 200 farm families living in a hill district called Mont Vernont. She told a dramatic story. In the early days of the Bolivarian government, she and her neighbours had occupied an idle farm, refused to accept the landlord’s eviction order, fought off an armed attack by his thugs (two farmers were wounded), and finally won title under the land reform law.

Mont Vernont farmers set up communal councils in each of the area’s 14 hamlets, which in Venezuela have authority to decide on and administrate local improvements. They worked to bring in health, electricity, schooling, and other services.

Mont Vernont is famous in Liberator for the success of its first electrification project. The farmers got funds to wire up one of their hamlets. By working some angles and contributing some free labour, they managed to stretch the money to cover electrifying not one but three hamlets. Such community control means cheap government.

As president, Maria visits the 14 communities to check on progress. She goes on foot and can reach three hamlets in a day. In these isolated rural communities, everything cries out for action. We reached another mountain farming community, Las Vegas del Torrito, by the worst road we’ve ever seen. At one point it dived into a gully and splashed across a stream, obviously passable only in dry weather and only by a truck or four-wheel-drive. Garbage was burning in piles by the side of the road.

There are 23 farm families in Las Vegas. The communal council decided to put human needs before issues such as roads and garbage. Their first project was a community building—a classroom, meeting room, and consulting area for a visiting Cuban doctor. A school is under construction. They have council assemblies every two weeks with attendance of between 40 and 100.

Bureaucratic obstruction

We also found in Libertador several examples of the obstruction farmers face from a conservative state bureaucracy.

There are small hog raising operations in the municipality, which generate manure that threatens local water supplies. The local government developed a solution: septic tanks that would eliminate pollution and odor while generating gas that can be burned for cooking. But the project was quashed by the ministry of the environment, on the grounds of zoning regulations.

There had been other incidents of this sort, like a ministry ban against construction of ponds where small farmers could raise trout.

What explanations do the ministry provide? “None whatsoever,” says Libertador mayor Argenis Loreto. “Just as we always say: this bureaucracy is eating us alive… We can’t change things with this type of state…. I’d like to dissolve the municipal administration and create a confederation of community governments.”

Battling shortages

During our visit, many basic food items were in short supply, especially in the Mercal stores. The shortages were causing discontent.

Partly, this reflects the success of efforts to improve living standards of working people. Venezuela’s poor now have more money in hand (more than double, by one estimate), and they are buying food at subsidized prices. They are eating better. Demand for milk has risen 50% in eight years. By another measure, demand for food rose by more than a third in three years.

Corruption is also a factor. Some subsidized food was being diverted from the Mercals and sold privately.

Market forces make matters worse. Scare tactics by the right-wing media have encouraged panic buying. Importers brought in too little food. Distributors resisted price controls by hoarding. Large amounts of food – often subsidized food – were being smuggled out of the country.

Public exasperation was increased by the fact that these problems were all foreseeable.

In recent months, the government has responded decisively. Price controls and import restrictions have been eased. Funds have been allocated to reinvigorate and expand the Mercal chain. Mercal stores have been placed under community control. Most importantly, a large state-owned food distributor has been established to import food on a massive scale for the Mercal network.

World food crisis

President Chávez believes that the food shortages in Venezuela are also symptoms of a looming crisis of supply on a world scale. He recently quoted an article from Canada’s National Post (January 7, 2008), reporting a speech by a Bank of Montreal investment expert. “A new crisis is emerging, a global food catastrophe,” the expert said. Raw food prices are up 22% in a year. Corn prices are up 44%. The U.S. produces more than half the world’s corn, and its exports are expected to shut off in three years.

Two dozen companies control world food supplies, says the bank’s expert.

Chávez identifies three causes of world food shortage, all of them hard to reverse.

  1. An increase in world demand, particularly for meat and dairy.
  2. A decline in yields, caused by global warming.
  3. “George Bush’s crazy plan to use food to make gasoline.”

Massive investment

The answer? In Chávez’s words, “With the grace of God, we will make Venezuela a powerhouse of food production.” Venezuela aims to increase cattle herds 50% in four years; to increase food production 2½ times over. The pace of government investment in agriculture has been stepped up greatly.

Many new socially owned food processing plants are being opened under community control. For example, on January 10, 2008, Chávez opened a milk processing centre, one of the largest in Latin America, in the state of Zulia. The centre’s history is typical of many of these projects. It began 47 years ago and was government-owned until 1995. Then it was then sold to an Italian firm, Parmalat, which ran it into the ground. The plant lay idle until the government repurchased it last year.

Zulia is an important cattle-raising area, and the plant will help local dairy farmers market their product. But it takes more than a single plant to create a healthy environment for farming. Alongside the milk plant, Chávez announced an array of measures for Zulia’s farmers:

  • A centre for genetic support of livestock herds.
  • A meatpacking plant.
  • A branch of the government’s Agrarian Bank, providing low-interest loans to farmers.
  • The rebuilding of 226 kilometers of rural roads.
  • Creating of a rural planning district, which will implement an integrated plan for supply of electricity, water, schools, health, security, and other services.

Such socially owned processing plants can fit into a farm marketing system that cuts out the profiteering private food monopolies. Small farmers get preference in sales to the socially owned processing plants, whose product can be passed on to the state distributor, and then to the Mercal community grocery, and finally to the consumer.

Venezuela’s agricultural efforts are also expressed internationally through its alliance with other countries that seek a path independent of U.S. control – an alliance called ALBA (Spanish for “dawn”). One result of this cooperation that we saw is a large vegetable garden in downtown Caracas – a demonstration site that was established with help from Cuba.

A massive challenge

Farmers in Venezuela, as in Canada, are aging. The young generation is mostly in the cities and has mostly lost touch with its farming roots. Venezuela needs to persuade tens of thousands of young people to return to the land. How will this be possible?

It will take more than economic support. For farming to flourish, it needs a rich rural culture. But this is Venezuela, where farmers cannot easily get a truck or tractor, let alone satellite TV and Internet. How can such needs be met in a poor country, with urgent problems on every side crying out for solution?

What’s more, the country is locked in conflict and threatened with attack from abroad, and the very survival of the social experiment led by Chávez is in question. Farmers cannot always count on the sympathy of government bureaucrats or police. And Zulia, where Chávez opened the milk processing plant, is often hit by right-wing violence initiated by paramilitary gangs that cross the border from neighboring Colombia.

So it won’t be surprising if Venezuela finds it difficult to achieve the high goals it has set for the expansion of food production. But its people deserve credit for setting the right tasks and tackling them with energy.

Support for small-scale farmers and rebuilding of family farming is an urgent priority worldwide. In this struggle, farmers in Canada share a common interest with the popular movement led by Hugo Chávez and with Venezuelan farmers.

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