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Venezuelan Government Involves Communal Councils in Combating Food Hoarding

Mérida, March 29th 2011 (Venezuelanalysis.com) – Indepabis, the government Institute for the Defence of People’s Access to Goods and Services, is issuing fines, promoting a free denunciation phone number, and calling for greater communal council involvement in order to combat current scarcities being experienced in Venezuela.

While the scarcities vary according to region, milk and sanitary product are scarce nationwide.

In Merida, for example, powdered milk (the source of milk for most Venezuelans because it is cheaper than its liquid alternative) has been very difficult to get for the last six months. Oil, diapers, and sanitary pads have also been quite scarce, and coffee has sometimes been scarce.

Indepabis president Augosto Montiel, speaking on YVKE Mundial radio yesterday, said the Venezuelan government, through the institution, would work with organized communities under a model of “social auditing” to defend the rights of consumers against speculation of prices and other illegal economic activity.

Indepabis has also been encouraging the formation of food security committees within communal councils so as to involve the community directly in the monitoring, denunciation, and resolution of food hoarding problems.

It also provides a free phone number for denunciations and has been inspecting shops to make sure they are complying with regulated prices. Those who don’t comply will receive fines but will not be shut down, “because the aim is not to affect the consumer but rather the speculator,” Montiel said.

He said organised communities had already played an important role in denouncing real estate abuses and specific housing construction companies who trick people into buying unfinished houses.

“It’s a complex process and we have to use the law to establish fines standardised in the Law for the Defence of People’s Access to Goods and Services, fines which should be in accordance with the type of irregularity or crime committed. In the case of the organisation of some construction companies ... many are obliged to return the money they charged illegally,” Montiel said.

He added that a few of those denounced were now in prison and that some had fled the country with the “savings of the cheated families”.

Article 132 of the law outlines fines for speculation and hoarding, which range from 100 to 5,000 tax units. One tax unit is currently 76 bolivars ($US 17.70).

Montiel said there are also some shop owners who don’t sell products in their shops because they don’t want to comply with the regulated prices, and then they re-sell the products at inflated prices by hiring people in the informal market.

“The national government guarantees food sovereignty and all agents that make up the networks of distribution, production and selling should respect the right of the community to have access to all food products- the regulated ones as much as the non-regulated ones,” he said.

Regarding the scarcity of personal hygiene products such as sanitary pads and nappies, Montiel said there was no good reason for such a lack of supply and that Indepabis was conducting an investigation.

“The importers haven’t complained of a lack of access to the dollar,” he said. Because of the government’s controls of the exchange rate, companies must apply for U.S dollars in order to be able to import.

“They have been given the required dollars needed for the buying of material and for production, there shouldn’t be any complaints in that respect, but it turns out that they aren’t distributing those items.”

He suggested the lack of such products in the stores implied hoarding in order to create an “irregular situation” by “fraudulently or artificially modifying the conditions of demand”, implying an increase in prices.

Opposition spokespeople and their press generally try blame the scarcity of products on the Chavez government, citing regulated prices and that some suppliers, producers, or supermarkets have been expropriated as the cause of the problem.

At the end of 2007 and start of 2008 there was a more serious food shortage, with a large proportion of basic products such as milk, rice, pasta, sugar, eggs, and toilet paper difficult to find. Some analysts went as far as to blame the issue, which was causing a lot of discontent, on the defeat of the proposed constitutional reforms of December 2007. 

At that time there were a range of factors involved in the food scarcity, including exaggerated discontent provoked by the private media causing people to stock up on products, general increased consumption as a result of increased government social spending, increased global food prices, deliberate hoarding by private food companies, and the selling of regulated goods on the black market (or in neighboring Colombia) by both private companies and corrupt officials working in government food supply chains.

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

In the long term, in response to this issue as well as part of the government’s plan for food sovereignty, the government has also nationalised some supermarket chains to create its “bicentenary markets”, expanded its own subsidised food markets Mercal and PDVAL, has nationalised and created new food factories, and launched the mission Agro Venezuela to try to increase local production, among other efforts.

Published on Mar 29th 2011 at 10.11pm