[R-G] Venezuela: Combatting Food Shortages

[Yoshie Furuhashi]

Here's a very good discussion (recommended by Michael A. Lebowitz) of
an important problem in Venezuela: Federico Fuentes and Tamara
Pearson, "Venezuela: Combatting Food Shortages" (Green Left Weekly
737, 1 February 2008).  From Fuentes and Pearson's discussion, though,
one gets a sense that the government, as well as its grassroots
supporters, sees the main causes of the problem to be corruption,
hoarding, and speculation (as they are most often mentioned in the
article), to be solved primarily by democratic control of those parts
of production and distribution (largely already existing parts though
a few new ones are being created) that are under ultimate state
control.  Those are unlikely to be the main causes of shortages and
inflation, however desirable more democracy in production and
distribution by workers and working-class communities is as an end of
socialism in itself.  Decades of underinvestment in the key sectors --
such as food production -- of economy can't be reversed by more
participatory democracy at local levels alone, at least not to the
extent of getting production to actually catch up with increased
effective demand (certainly not in time for the next crucial
elections).  (For similar reasons, there are growing energy shortages
in many countries from China to South Africa, from Iran to Argentina.)
 There would have to be democratic national debates and decisions
concerning what kind of trade-off between increased consumption and
increased investment, more democracy and higher productivity, and so
on Venezuelans want; whether or not it's possible to make more and
better investment in the key sectors under the present capitalist
national economy (that is overall more capitalist than not just Cuba
but Iran); if yes, how; if not, what is to be done; etc. -- Yoshie

<http://www.greenleft.org.au/2008/737/38166>
VENEZUELA
Venezuela: Combatting food shortages

Federico Fuentes & Tamara Pearson, Caracas & Merida
1 February 2008

"We lack everything" Frances Buitrago, a small shopkeeper in the city
of Merida, commented to Green Left Weekly. "There isn't any milk,
rice, mayonnaise, oil, wheat, or butter."

Luis Albonoz, who owns a small fruit and vegetable store in the same
city, says his store hasn't been directly affected by the food
shortages that have occurred throughout Venezuela, but told GLW that
"it affects us as consumers. Food is necessary and the prices we have
to pay are too high. We have small kids so we have to pay the price."

Asked who he thought was responsible for the problem he replied: "It's
a problem of smuggling. Some people hoard large quantities and then
they sell them at much higher prices."

"We lack milk, rice, spaghetti, sugar, eggs, chlorine and toilet
paper", said Maximiliano Fernandez, as he looked around his packaged
food and liquor store. "Every three days we buy milk but there is no
powdered milk."

The growing problem of food shortages in Venezuela has become a real
point of discussion. Go to any supermarket or small shop and people
are talking about it, complaining that they can't buy what they need
and sharing anecdotes about how expensive products have become.

Rising discontent over food shortages has become a major challenge for
the government of Venezuela's socialist President Hugo Chavez. More
than a few analysts have pointed to the issue as one of the factors
behind the defeat of Chavez's proposed constitutional reforms — that
aimed to strengthen popular power and help open the transition to
socialism — in the December 2 referendum.

It has also exposed a number of problems that the Bolivarian
revolution — as the process of change led by Chavez that aims to
overcome underdevelopment and poverty is known — has been unable to
overcome. Solutions to such problems are crucial to the survival of
the process.

What is responsible?

It is undeniable that the campaign by the right-wing private media has
been a crucial factor in fuelling discontent, demonstrating the
ongoing influence the old ruling elites that own the private media
continue to have. This campaign has helped make the shortages worse as
spooked customers rush to stock up.

This campaign gathered momentum in the lead up to the referendum. The
percentage of people who felt that shortages were a problem increased
from 64% in the third quarter of 2007 to 78% in the last.

At the same time consumption has been dramatically increasing in
Venezuela, fuelled by a significant economic boom and the Chavez
government's social policies that have greatly increased the spending
capacity of the poorest.

A recent report of the Venezuelan American Chamber of Commerce and
Industry revealed that between 2004 and 2006, the real income of the
poorest 58% of the population increased by 130% after allowing for
inflation. This figure does not take into consideration other benefits
that have come about as a result of the government's social missions
that provide free education and health care, nor the impact of the
Mercals — state subsidised supermarkets that sell products at an
average 39% below prices found elsewhere.

As a result, consumption has more than doubled from US$24 billion in
2004 to $52 billion in 2007. The increased consumption, with
production falling well short of demand, partly explains the
shortages.

Global factors

During his January 20 Alo Presidente TV show, Chavez explained how
production shortages are not just a Venezuelan issue. Using milk as an
example, he pointed out how global consumption of milk had risen by
14.3% between 2002 and 2007, yet the number of cows for milk
production increased by just 1%.

Quoting from the article "Forget oil, the new global crisis is food"
in the January 7 Financial Post, he said: "The impact of tighter food
supply is already evident in raw food prices, which have risen 22% in
the past year … wheat prices alone have risen 92%".

Chavez said the causes included the effects of global warming, leading
to increased droughts, as well as the fall of the US dollar and
speculation on the market.

Another factor "is Bush's crazy plan to use food to make fuel",
referring to the US plan to use subsidized corn production in order
not to feed people, but rather cars run on ethanol.

This plan has led to the global price of corn increasing by 44% over
the past 15 months, with "US corn exports in danger of seizing up in
about three years if the country continues to subsidize ethanol
production", according to the Post.

"And which are the countries most affected by this crisis?" asked
Chavez. "Countries like ours, that as a result of a whole century of
abandonment" of agricultural production, with the economy geared
around exporting oil, "therefore do not have our production
guaranteed".

While these factors are real, there is more to the story. For ordinary
consumers confronting rising prices and shortages of basic goods,
opinions vary as to who is responsible.

As the referendum approached, the media campaign was clearly biting,
with polls indicating that people were increasingly directing their
discontent towards the government, rather than the capitalist owners
of supermarkets or agribusiness.

A survey published in October and conducted by Datanalisis, one of the
more reliable polling agencies in Venezuela, revealed that 88.4%
believed that the solution lies in the government and private
companies working together, with 88.1% saying that private companies
should be producing more.

Asked if they believed that government price controls — introduced in
2003 to deal with the economic devastation caused by a bosses lock-out
that aimed to overthrow the Chavez government — were causing
shortages, 69.3% said yes.

In response, the government has removed price controls on all but 20
products. Previously some 400 products were subject to controls in an
attempt to assist consumers.

The removal of the controls has been welcomed by capitalists and
private media, who have blamed them from the beginning for causing the
shortages. The argument presented is that since producers were being
forced to sell their products at lower than market prices, production
would drop automatically as there was no incentive to continue it at
either existing levels or increase it.

This argument is true in a capitalist economy, where the sole purpose
of production is to generate the greatest possible profit for the
private owners of the means of production. If a capitalist can produce
something else that makes them more money they will, regardless of the
social consequences.

Capitalist sabotage

However, the process of change in Venezuela has increasingly aimed at
moving away from organising the economy along those lines. The Chavez
government has increasingly been implementing policies, such as price
controls, that go against the interest of the capitalists in order to
gear the economy towards the needs of the majority — a shift Chavez
has described as an attempt to construct a "socialism of the 21st
Century".

In response, the capitalists have attempted to protect their interests
by trying to overthrow Chavez. It is no surprise that Venezuela's
chamber of commerce, Fedecamaras, was a leading force in the failed
military coup against Chavez in April 2002 and the bosses lock-out
that started in December that year.

The capitalists have fuelled the food shortages by holding goods back
from the legal market where price controls lower profit margins, then
selling them illegally at exorbitant prices on the black market.
Another way around the price controls has been to smuggle food out of
Venezuela to be sold in neighbouring Colombia.

In this way, as well as maximising profits, capitalists also hope to
destablise the government.

That this would be an outcome of price controls over an economy still
predominantly capitalist should come as no surprise. Yet it appeared
it did for the government, which was completely unprepared for such
problems.

Even worse, sections of the corrupt state bureaucracy helped
exacerbate the problem while attempting to deny it existed.

The government has taken measures attempting to overcome the problem,
including, over the last three years: decreeing the creation of 21
agribusinesses through the state-owned Venezuelan Agrarian
Corporation; financing 51 Companies of Social Production (EPS), mainly
cooperatives; created several new factories through joint ventures
with Cuba and Iran; and established 6000 free food houses for the
neediest.

It also initiated Mission Mercal, which coordinates 14,000
government-subsided stores outlets, while making some moves to buy out
or expropriate companies involved in food production.

However, these measures fall well short of what is needed to overcome
nearly a century of neglect of the countryside, which has left
Venezuela dependent on imports for around 70% of its food.

Mercal accounts for only 22.7% of national consumption. The new
state-run agribusinesses and EPS's account for only 1.48% of
agricultural produce.

Corruption and bureaucracy

Furthermore, Mercal has become riddled with the corruption that is
crippling the Venezuelan state, with many of its products appearing on
the black market or in Colombia. Often elements of the National Guard,
particularly those stationed on the Colombian border, have been found
to be involved.

Additionally a number of the factories being constructed to help
increase domestic production are well behind schedule, and many
already built are producing well below capacity — suffering from
bureaucratic inefficiency and, in some cases, active sabotage.

While several thousand factories have been shut down by their
capitalist owners, who are refusing to invest and produce, only a
handful have been taken over by workers and reopened under workers'
management.

This is despite the calls made by Chavez for workers to take over idle
factories since 2005. The weak and disorganised state of the workers'
movement, with low levels of consciousness and organisation, have
combined with the problems of bureaucracy to hamper the revolution's
ability to respond to such sabotage.

Another factor is the slowness of the land reform process — which
seeks to redistribute idle land owned by the state or large landowners
to campesino (peasant) cooperatives to stimulate production. The
problem is again that while the revolutionary government has formal
control over state institutions, its programs are being sabotaged by
either consciously counter-revolutionary elements or through
bureaucratic ineptitude — in this case within the National Institute
for Land.

Frustration among campesinos has grown as many continue waiting for
promised land and loans. At the same time, large landowners have
increasingly resorted to violence against the campesino movement, with
police and courts either unwilling or unable to bring the perpetrators
to justice

Mobilising people's power

It is in this context that Chavez made his recent call for an alliance
with the "national bourgeoisie" — Venezuelan capitalists — in an
attempt to stimulate production. He announced a 40% increase in the
price of milk and more incentives to help milk producers.

However, the offer of help came with a warning: those that refuse to
produce, or who sell their produce abroad, will be expropriated.

He called on the people and the military to join the battle against
hoarding and speculation by monitoring stores and factories. Any
caught violating the law are to be shut down and taken over.

Greater policing of the Colombian border has already seen more than
2000 tonnes of contraband food intercepted.

Dealing with the food shortages is essential for the survival of the
government. Elections for governors and mayors will occur later this
year, and with discontent at poor government management growing and
the pro-capitalist opposition revitalised after the referendum defeat,
some Chavistas are openly talking about the possibility of losing some
important positions to the counterrevolution.

Fundamental solutions

Relying on food imports and concessions to the capitalists to deal
with the shortages, while possibly alleviating the crisis in the short
term, cannot be a long-term solution.

Only by shifting control over production and distribution into the
hands of the workers and communities can the issue by decisively
tackled. The working people are not driven by individual profit but
the collective needs of all.

The revolutionary process has already revealed this dynamic — the
actions of working people organised from the grassroots smashed the
December 2002-January 2003 bosses' lock-out by collective organising
that included taking over important points of production and
distribution.

For this reason, the new milk plants the government is building will
be managed and controlled by communal councils — elected grass roots
bodies of popular power.

The government also announced in January the creation of PDVAL — a
food production and distribution company to administered by the state
oil company — to work parallel with Mercal. The food will be
distributed in conjunction with a private distributor in municipal
markets' and through PDV petrol stations, which have been mooted to be
handed over to communal councils to administer.

In the impoverished Caracas neighbourhood of Petare, communal councils
have already begun to demand that the local Mercals be placed under
community control. Meanwhile, a section of the National Union of
Workers (UNT) has called for the creation of a united front against
hoarders and food shortages, calling meetings of unions, communal
councils, and campesino and social organisations in the states of
Aragua and Carabobo.
--
Yoshie
<http://montages.blogspot.com/>