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News: Economy

Venezuelan Government Announces Measures to Overcome Food Shortages

Mérida, 14th April 2013 (Venezuelanalysis.com) – The Venezuelan government has announced a range of measures to overcome the increase in food shortages in the country.

In recent months shortages of some basic products such as milk, butter, cornmeal and sugar have been observed throughout Venezuela. Last month shortages reached their worst levels since April 2009, according to the country’s Central Bank.

On Monday night Vice President Jorge Arreaza announced a range of government measures to resolve the problem.

The regulated price of chicken, beef, milk and cheese will be increased by 20% to stimulate production. Most of these products last saw price rises in 2011, with price controls on basic goods introduced to ensure affordability for the poorest Venezuelans.

Other measures focused at increasing production of basic foodstuffs include removing income tax on primary agricultural production, introducing state subsidies for sugar production, and granting increased prices to sunflower oil producers.

The government will also directly invest in a 1,000 hectare greenhouse complex and re-organise state agro-industrial production.

Officials attribute the increase in food shortages to an “economic war” by the private sector against the government, citing high consumption and accusing food makers of reducing production and hoarding food in order to create scarcity.

Meanwhile, some economists and the conservative opposition argue that government price controls on basic goods and the lack of foreign currency granted to food producers are to blame for the shortages.

Opposition leader Henrique Capriles criticised the increase in some regulated food prices as “starving [the country]” and accused the government of being “irresponsible and lying”.

The government has also signed deals with Mercosur allies such as Brazil to import around 700,000 tons of foodstuffs in the coming days in a bid to end shortages.

Meetings with the Polar Group

The government is also holding several meetings with Venezuelan food giant Polar to help resolve food shortages in the country.

On Saturday President Nicolas Maduro accused Polar of participating in an “economic war” against the government by reducing production and hoarding to purposefully create scarcity.

According to the company’s own statistics, Polar produces 48% of the products of Venezuela’s basic food basket. Its president, Lorenzo Mendoza, is the second richest person in Venezuela and 329th richest in the world, Forbes magazine states.

On Monday night Mendoza held a press conference in which he called Maduro’s accusations “false” and argued that his company had increased production of cornmeal, the country’s staple, by 10% so far this year.

Venezuelan foreign minister, Elias Jaua, countered Mendoza’s statements, saying that both the government and Mendoza “have responsibility” for food supply in Venezuela. He further argued that Polar could “produce more, distribute more, cooperate with supply, and [help] against hoarding”.

On Monday night Mendoza and government representatives met to analyse Polar’s production chain to help ensure the supply of basic foodstuffs to the Venezuelan population.

Vice President Arreaza later reported that the meeting was “productive”. He also said that Nicolas Maduro was committed to dialogue with the private sector to find a “point of balance” over the granting of foreign currency to food producers for imports.

Nevertheless, Arreaza warned that “economic actors should keep to the margins of party political activity and dedicate themselves to production”.

Maduro is also set to hold a second meeting with Mendoza today, where he has promised to “make him [Mendoza] work for the country’s interests”. 

Published on May 14th 2013 at 9.29pm