Chavez Increases Subsidized Food Budget by 41 Percent

With the Christmas holidays approaching, customers lined up to buy discounted food at the grand opening of a new government owned supermarket in the Caracas suburb of Macuto.

Venezuelan President Hugo Chavez’s government created the subsidized food program called Mercal in 2003 to prevent hoarding and price speculation by food producers and retailers in the aftermath of a two-month oil strike that almost crippled his government.

Since then, Mercal and its sister outlet PDVAL have become an indispensible part of the government’s goal of providing the poor an affordable alternative to Venezuela’s high food prices.

In less than a decade 17,000 stores have been established in almost all of the Venezuela’s shantytowns and rural communities while the program has been praised by the United Nations Food and Agriculture Organization for reducing undernourishment levels by 20 percent.

Now that President Chavez has been reelected to another 6-year term, plans are underway to increase Mercal and PDVAL’s funding. This week the Chavez government issued a presidential decree increasing the programs budget by 41 percent from last year.

But despite the government’s action in the food sector, inflation remains extremely high, while food shortages still affects certain products such as sugar and corn flour.

The government has made efforts to produce their own food by supporting and establishing agricultural cooperatives that have increased domestic production by 44 percent, but still two-thirds of its food is imported from other countries mystifying many Venezuelans.

The government’s subsidized food program is going to expand significantly in the next year. Government officials plan on putting these markets in the new housing projects that the government is currently building.