Venezuela Expands State-Owned Agricultural Production, Processing, and Distribution

 

During his weekly talk show on Sunday Venezuelan President Hugo Chávez inaugurated the construction of a state-owned agricultural complex that will integrate the production, processing, and distribution of basic foods, and avoid price speculation by intermediaries. Also, the state oil company PDVSA announced it has risen in rank from eighth to fourth among the world's oil companies.

By James Suggett - Venezuelanalysis.com

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President Hugo Chavez with workers at the El Sombrero construction site (Prensa Presidencial)
President Hugo Chavez with workers at the El Sombrero construction site (Prensa Presidencial)
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Mérida, June 8th 2009 (Venezuelanalysis.com) -- During his weekly talk show on Sunday Venezuelan President Hugo Chávez inaugurated the construction of a state-owned agricultural complex that will integrate the production, processing, and distribution of basic foods, and avoid price speculation by intermediaries. Also, the state oil company PDVSA announced it has risen in rank from eighth to fourth among the world's oil companies.

The president visited the construction site of the El Sombrero agricultural complex in Guárico state, which will be equipped to process grains and soy milk during its first phase, tomatoes, vegetables, and fruits in its second stage, and dairy products, corn flour, and animal feed in its third stage.

The complex will include a tractor assembly plant, which was made possible by the technology transference agreed upon as part of a bi-national accord with Argentina. A large portion of the El Sombrero complex's 129 workers have travelled to Argentina to be trained, as well. 

"We are on course toward sovereignty... independence is the objective, and the process of achieving it is socialist revolution," said Chávez on his nationally televised talk show, called "Aló, Presidente."

A guest on Chávez's show, the president of the National Agricultural Investigation Institute (INIA), Iván Gil, highlighted the government's optimism for an increase in national corn production this year, with the assistance of Chinese agronomists who have advised the Venezuelan government as part of a bi-national accord.

According to the government, 917,000 hectares of corn will be planted this season. To boost production, INIA plans to donate sacks of seeds to farmers, and the government's National Fund for the Developmen of Socialist Agriculture (FONDAS) has given credits to farmers for the purchase of seeds.

Chávez explained that the expansion of state-owned and community-owned agricultural production must be accompanied by the construction of a new "socialist market that does not pass through capitalist intermediaries," as an alternative to the worldwide capitalist market. "If not, you can be sure we will never move away from capitalism," he said.

To emphasize the importance of community-owned agricultural production and distribution networks, Chávez founded a new "Fundo Zamorano," or Zamoran Farm, named after Venezuela's historic peasant rights leader Ezequiel Zamora. These are large, collectively managed farms that produce for local consumption and for distribution in solidarity markets where products are sold at regulated prices.

In Venezuela there are currently 84 active Zamoran farms, according to the National Lands Institute (INTI), which manages the government's land reform program.

President Chávez encouraged the Zamoran Farms to take advantage of Venezuela's new Popular Economy Law, which gives structure and legal recognition to the creation of new local currencies and local moneyless exchange markets.

Aristides Mendoza, a member of the Zamoran Farm that Chávez inaugurated on Sunday in Sucre state, said, "Zamoran Farms were created with the intention of prioritizing man as the fundamental axis of agricultural development in harmonious interaction with the environment, and the social, political environment."

PDVSA increases its assets

Energy and Petroleum Minister Rafael Ramírez also appeared on Chávez's show to announce that the state oil company has risen in rank from eighth to fourth among oil companies globally since Chávez was elected ten years ago. PDVSA's physical assets have risen from $50 billion to $71 billion, as a result of $15 billion in investments in exploration and production, and the setup of majority state-owned mixed enterprises with multinational oil companies in the Orinoco Oil Belt since 2007, according to Ramirez.

In 2008, PDVSA brought in $9.4 billion in profits, which represented a 50% increase over the year before, according to PDVSA's internationally audited annual financial report, which was released on Sunday. The report also highlights that PDVSA's contributions to national development increased to $53 billion last year, an increase of $9 billion since 2007.

Chávez and Ramírez both said the financial report refutes claims by government adversaries that PDVSA has become financially weaker since the Chávez government has increased state control of the company, expropriated oil-related services, and increased PDVSA's contributions to national development.

"The Fourth Republic," said Chávez, referring to the governments in the four decades preceding his election, "were breaking apart PDVSA in order to privatize it. That was their plan."

Meanwhile, the price of oil continues to rise from lows in the $30 per barrel range at the start of the year. Last week, Venezuelan oil was valued at just over $61 per barrel and the average price of oil produced by member countries of the Organization of Petroleum Exporting Countries (OPEC) topped $67 per barrel. Venezuelan oil has averaged $44.1 per barrel so far this year.

The Energy and Petroleum Ministry attributed the rising oil prices to "greater demand for crude, the optimism for an improvement in the global economy, the persistent depreciation of the dollar compared to other currencies, and the spike in the stock markets."