Mérida, October 4th 2010 (Venezuelanalysis.com) – On his Sunday talk show, Venezuela’s President Hugo Chavez drove tractors and inspected corn crops, constantly wiping sweat from his brow as he pledged to accelerate land reform and increase the government’s share of food production and distribution. The president also announced the nationalization of the agricultural supplies company Agroisleña and the Venezuelan properties of the British Vestey Group.
The show took place in Guárico state, where the president’s United Socialist Party of Venezuela (PSUV) won the majority of seats in the National Assembly elections on September 26th. The PSUV prevailed in most of Venezuela’s rural districts, which have received substantial public investment as part of the Chavez government’s efforts toward what it calls “food sovereignty.”
Chavez inspected the progress of the “Tiznados River Socialist Agrarian Project,” a state-owned “social production company” that represents the government’s attempt to construct a model of food production based on worker participation in decisions, responsibility to the local community, and the satisfaction of needs rather than the pursuit of profit.
The president announced plans to quadruple the extent of the project’s irrigation system to 32,000 hectares by the year 2015; expand the production of rice, soy, legumes, and vegetables; build a vegetable and fruit dehydration plant, an agricultural machinery factory, processing plants for soy and cow milk, and an animal fodder factory; and construct a communal city where farmers can live.
To improve the infrastructure that is necessary for the expanded food production, Chavez announced plans to build 20 kilometers of canals, two silos for animal fodder, improve six important highways, upgrade communications infrastructure, and extend electricity to all of the state’s farmhouses.
The public investments will be made by state-owned banks and financed by a recent $5 billion credit line from China, which is the first installment of a $20 billion credit line promised by the Chinese last April. Also, Venezuelan farmers will study agriculture in Chinese universities, Chavez said.
Venezuela, a member of the Organization of Petroleum Exporting Countries, currently relies on food imports. Food production has increased as a result of the Chavez government’s increase in financing to the agricultural sector from less than half a billion bolivars in 1998 to 20 billion bolivars in 2009. However, demand for food has increased even more as a result of anti-poverty programs that have drastically raised the nation’s nutritional levels and reduced malnutrition from 21% to 6% during the same time period.
Venezuela’s goal now is to reduce its dependence on multi-national food companies and reduce its susceptibility to global food crises, Chavez said on Sunday. Venezuela also plans to integrate the state-owned food producers with a growing state-owned network of food distributors and local food markets that sell the food at regulated prices that are sometimes as much as 40% below market prices.
“We cannot hand [the food] over to the usury of the capitalist model; now we have to continue constructing the socialist system of distribution and marketing,” Chavez said on Sunday. “We must pick up the pace, because the future of Venezuela depends on it. We must turn Venezuela into an agro-industrial power.”
As part of a “new offensive” in the process of land reform, Chavez announced the nationalization of 200,000 hectares (495,000 acres) of land that are property of Compañía Inglesa, a Venezuelan subsidiary of the Vestey Group, and the nationalization of the agricultural services company Agroisleña.
Agricultura and Lands Minister Juan Carlos Loyo confirmed plans to nationalize 250,000 hectares (618,000 acres) of farmland in October and twice that amount in November.
“We are going to accelerate the agrarian revolution… We must liberate the land from the hands of the large estate owners,” Chavez declared on Sunday.
The Vestey Group is a major meat producer based in the United Kingdom and has been owned for four generations by the Lord Vestey family, one of the wealthiest families in the U.K. It began operating in Venezuela in the early 1900s with the purpose of providing meat to the growing British population. When the Venezuelan government stepped up its land reform effort in 2005, it purchased tens of thousands of hectares from the Vestey Group and handed them over to landless peasants. Peasant organizations accused the Vestey Group and its subsidiary, Agroflora, of hiring assassins to attack and intimidate them.
Monday night, during a phone call to a nighttime TV program, Chavez announced that his government had reached a “friendly agreement” with Vestey for the sale of its Venezuelan land holdings and for 130,000 cattle. “The English company is ready for a barbecue,” Chavez added.
Agroisleña is a Spanish-controlled company that has been operating in Venezuela for 52 years. It currently operates a chain of silos, stores, and branch offices and controls a large portion of the national market in agricultural supplies.
In an official communiqué on Monday, Agroisleña said it had not received any information directly from the government about the nationalization and declared, “The Company absolutely and categorically rejects an expropriation measure.” The communiqué said the company provides loans and supplies to 18,000 food producers in the country, and that part of the company’s mission is “to contribute to the achievement of the food sovereignty and independence of our country.”
In response, Chavez said the nationalization will not be rescinded, and he accused the company of selling fertilizer and seeds at speculative prices. “Let them protest, they have the right, but they are expropriated. I gave them a chance. We are going to regulate the prices of seeds and the rest,” Chavez said.
Opposition groups harshly criticized the president’s announcements on Sunday, accusing the government of becoming a large estate owner itself. Peasant organizations and the Communist Party of Venezuela applauded the government’s effort.
Earlier this year, the National Assembly passed a reform to the land law that made it easier for landless farmers and the state to acquire privately owned land. Between 2001 and 2009, the government nationalized 2.5 million hectares (6.2 million acres) of land from private owners and turned it over to landless farmers, cooperatives, or state-owned agricultural projects.