Venezuela to Expropriate Idle Corn Processing Plant

Venezuela's Minister of Agriculture welcomed the Barinas state governor's signing of a decree that declared an idle corn processing plant to be of public utility, a first step towards expropriation. The owners, Venezuela's largest food distributor, denied that the plant is idle and said it will use all legal means to fight the expropriation.

Caracas, Venezuela, September 28, 2005—The governor of Barinas state in Venezuela, who also is President Chavez’s father, signed a decree stating that the Promabasa corn processing plant, which is owned by Polar, one of Venezuela’s largest food producers and distributors, is of “public utility.” The decree thus clears the way for the expropriation of the plant, which the Chavez government says has been idle for three years.

Venezuela’s Minister of Agriculture and Land, Antonio Albarrán, said that the state takeover of Promabasa would directly and indirectly generate over 3,000 jobs. “This is a historic deed,” said Albarrán at the signing of the decree.

The owners of Promabasa, however, deny that the plant is idle and say that it is operating normally. Lorenzo Medoza, the president of Polar, said, “This decision is unjust, disconcerting, and unconstitutional according to our criteria. We will resort to the only way to defend ourselves that we have always used: the legal route.”

Mendoza described the process that Promabasa had recently gone through, saying that at first the Ministry of Agriculture seized the plant, but then released it when the company showed that its silos were operating normally. However, the Barinas state legislative council took up the matter and urged the governor to pass the decree that declared it to be of public utility.

Mendoza admitted, though, that Polar did have corn processing and corn oil extraction equipment on the plant that has not been used since 2002. Polar had moved these processes to plants in different parts of the country, as part of the company’s internal reorganization. The parts of the plant that are still being used are the storage silos.

The expropriation decree argues that Promabasa, which it says has been idle since 2002, has not only weakened the country’s industrial infrastructure, but has negatively affected the adequate placement and use of Barinas’s growing corn production.

According to article 115 of Venezuela’s constitution, the right to private property is limited by public utility and the general interest, in which case private property may be expropriated, but only with just compensation.

The intended expropriation of Promabasa is part of a larger campaign of the Chavez government to turn over idle factories and agricultural land to workers and farmers. Recently Chavez said that the government is studying a list of over 700 idle factories as possible candidates for expropriation. So far, two factories, a paper processing plant and a valve-making plant have been turned over to workers, to be run under state-employee co-management.