Chávez Increases Corn Prices, Announces Shift From Oil to Food in Venezuela

The president of Venezuela, Hugo Chávez, announced Thursday that the regulated prices of corn and sorghum will be raised by 30% and that a new Socialist Agricultural Development Fund (FONDAS) has been launched to promote national food production.
President Chavez drives a tractor during his announcement about the increase in Venezuelan food production. (Foto: Feliciano Sequera)

Mérida, April 26, 2008 (– The president of Venezuela, Hugo Chávez, announced Thursday that the regulated prices of corn and sorghum will be raised by 30% and that a new Socialist Agricultural Development Fund (FONDAS) has been launched to promote national food production.

“The day will arrive when, just like we send petroleum to other countries, we will be able to do the same with corn, because severe hunger continues to grow [worldwide],” the president stated.

Venezuela produced 2.2 million tons of corn last year, which represents a 300% increase in national corn production since 1999, Chávez declared. He recounted that corn production had fallen in the decade prior to his election from 1.2 million tons in 1988 to 980,000 tons in 1998.

Nicolás Constatino, the president of the Venezuelan Corn Flour Industries Association, which has made several appeals for an increase in the regulated price of corn, said the new adjusted price should actually be 25% higher than it is, and that the price of corn flour should now be increased by 29% to maintain equilibrium, if the country is to satisfy its growing internal demand in 2009.

Chávez assured that in addition to increased prices, corn producers will be offered a per-kilo subsidy, low interest rates on credits, and certified seeds with the help of the new 26 hectare (64 acre) “socialist” genetic technology center in Barinas state, from which Thursday’s announcements were made.

Also, Venezuela will continue to receive tractors and other agricultural technology from Argentina and plans are underway to build a tractor factory with assistance from Iran, Chávez mentioned, emphasizing his gratitude toward these nations for their cooperation in Venezuela’s efforts to achieve food security.

The head of state also referred to the United Nations’ call for increased world food production to help alleviate the food crisis that has spurred riots and protests in 33 nations. “The FAO (Food and Agriculture Organization) called on all the countries in the world to produce more food, and in this we are already moving forward,” Chávez boasted.

He highlighted that general food production in Venezuela has risen by 2.3% annually during his presidential term, compared to .9% during the decade prior. This is good, but not good enough, because producing enough for national consumption plus exports “is the ideal and we are going to achieve it,” the president said.

However, the president of the National Federation of Cattle Producers (FEDENAGAS), Genaro Méndez, said the government “presents statistics that do not correspond to reality.”

According to Méndez, the dairy industry in the country is at a “standstill,” and beef production decreased by 100,000 tons last year, in contrast to government figures. “I ask that the national government tell the truth to the producers in the country,” Méndez said.

But Vice President Ramón Carrizalez assured in an interview that the government has boosted its research efforts on the entire food supply chain, and now has an accurate assessment of 80% of the national situation.

Carrizalez said this is part of the “permanent” process of “Revision, Rectification, and Re-advance,” the “three Rs” which have characterized the period following the electoral defeat of the constitutional reform proposal last year.

With regard to food, the government “has had to make changes because we realized we were wrong in some things… we did not eliminate the bureaucratic obstacles like we believed… we are permanently self-criticizing and correcting, but what I can for sure guarantee is that we have advanced.”

According to Carrizalez, the government does not want to isolate the private sector, but rather has “been in a process of frank conversations” with private businesses. The private sector has been right in some cases, prompting the government to improve the situation by lifting price controls on certain products and reducing obstacles to imports, Carrizalez recounted.

“There exists a serious private sector that wants to resolve problems, that wants to converse with us. We do not ask that they come politically in our direction, no, what we want is a nationalist attitude. With them, we want to work,” the Vice President told Panorama newspaper.

The government’s goal is to have a 3 month reserve supply of food by the end of this year, Carrizalez said. He insisted that the situation in Venezuela be understood within the context of the global food crisis, which has caused world food reserves to drop to a 30-year low, according to the director of the World Food Program Josette Sheeran.

President Chávez said Thursday that the method for achieving its goals is “socialism,” which is “the future.” He pointed out that the government has nationalized large, idle estates and turned them into Socialist Production Units (UPS) “with their own economic model” based on “social property, which is not private property, it is for everyone.”

Now, it is the workers’ responsibility to transform production from capitalist to socialist, the president said. He called for the creation of a “National Socialist Farmers Front” of agricultural workers, who “should possess a conscience of social duty and exercise this for the collective benefit.”

Reflecting on the future development of Venezuela, Chávez stressed that “we should move away from the oil-based production model. The future of the country is in the land, in the agricultural project, not in petroleum. Food production is the most important.”