Chávez Revving Up Revolution with Land Takeovers

Editorial comment by Arturo Rosales

As a continuation of the broad information in the article below, by Humberto Márquez, President Chávez continued today with the takeover of the Spanish agro company, Agroisleña. In his television program, Aló Presidente (Sunday, October 10), Chávez appointed the board of directors and announced that the company would change its name to Agropatria. Together with Agriculture Minister Loyo, Chávez announced the new selling prices to food producers for seeds and fertilizers which were formerly controlled on a capitalist price basis by Agroisleña.

Minister Loyo had commissioned a study on the pricing structure of Agroisleña’s products and the result was an across the board reduction in selling prices by an average of 49.3%. Some examples are – corn seed was reduced by 41.7%; black bean seed by 29%; urea which Agroislaña sold for Bs.F. 46 was reduced to Bs.F 18.9 per 50kg sack and “triple fertilizer” which was selling for Bs.F 80 per 50kg was reduced to Bs.31.3, a reduction of 60.8%. These new prices will take effect from Monday October 11th. 

Chávez gave instructions to Information Minister Mauricio Rodrígez to publicize these measures which should work their way through to the end consumer. All the new prices still allow the new company to make a profit for future investments and maintenance without reducing the workforce as would be the case in a capitalist takeover scenario.

Agroisleña was also supporting producers with agricultural loans.

However, the trick was to borrow money from the government controlled Banco de Venezuela at 8% (rate set by law), and lend the money on to the small producers at 15% – 16%. This is completely illegal, classified as usury and Chávez guaranteed all producers the legal agricultural loan rate of 8% starting tomorrow.

As if the expropriation of Agroisleña was not enough for the Venezuelan opposition to stomach for one week, Chávez also gave instructions to the state governors, mayors, armed forces and the Bolivarian militia to be alert for price speculation. He said that fines and closures for 48 to 72 hours did not work since offenders would simply increase prices a few cents and recuperate the fine. The only solution was to intervene the offending businesses, whatever their size, and expropriate them, handing over control and running to the local communal councils and communes so as to protect the interests of the people.Readers can clearly see that the prices being charged by Agroisleña were based on speculation and unseemly profit margins. This has been and still is a problem in the whole Venezuelan economy and is the main reason behind the high inflation rate in recent years.

Finally, and to make the point that the revolution is being radicalized as Marqués points out in his article, Chávez announced two further nationalizations at the end of his TV program. These were the privately owned oil and derivatives company, Venoco and the agro industrial company Fertinitro. He stated that these companies were buying raw materials from PDVSA in the case of Venoco and Pequiven in the case of Fertinitro, and selling then packaged at up to 300% – 400% gross profit. The same as Agroisleña was doing.

These actions to protect the public against rampant price speculation and abuse have been on the cards for at least three years. These companies simply thought that they could continue to mock Chávez’s warnings and the laws. Unfortunately for them, but fortunately for the Venezuelan people, they were proved completely wrong.

Whatever views readers may have about nationalizations and state control, can a society really allow powerful foreign private interests to control the food supply and prices when they has not even been elected?  
Chávez’s final words to close the program were: “With these prices we are hitting back hard at inflation, speculation and capitalist theft.” 

– Arturo Rosales, Senior Columnist
Axis of Logic

(IPS) – Venezuelan President Hugo Chávez announced the expropriation of a subsidiary of the British Vestey Group, and of Agroisleña, a major agricultural firm founded by Spaniards half a century ago, indicating that he is radicalizing his Bolivarian revolution in spite of a drop in support for him in the recent parliamentary elections.

In a nationally televised telephone interview late Monday, Chávez said Venezuela would take complete control of hundreds of thousands of hectares of land, including some 130,000 head of cattle, owned by La Compañía Inglesa (The English Company), which is controlled by the Vestey Group.

Vestey has owned property in the country since 1909. The president said compensation had been negotiated with the company.

Since 2001, the government has expropriated, with compensation, some three million hectares of land that were in private hands, and has issued permits to tens of thousands of families to work a total of two million hectares.

Chávez announced the expropriation of Agroisleña on his television show “Aló Presidente” on Sunday Oct. 3, a week after the elections, when he also said the state would take over a further 250,000 hectares of land in coming weeks.

During the broadcast, he also called on the armed forces to train armed militia among the populace. “Whoever saw an unarmed militia? We need territorial militias made up of producers, workers, farmers, the people in arms,” he said, addressing military commanders.

Militias are opposed by anti-Chávez groups, because they are perceived as the “armed wing” of the leftwing political parties they oppose. 
The president “understood domestic and, above all, international interpretations of the September election results as a reverse for his political project, and felt compelled to prove that his revolution is making headway,” political analyst Manuel Felipe Sierra told IPS.

In the new single-chamber legislature elected on Sept. 26, 98 of the 165 seats will be occupied by lawmakers of the governing United Socialist Party of Venezuela (PSUV) and its ally, the small Communist Party; two lawmakers will be former Chávez supporters belonging to the leftwing Patria Para Todos (PPT, Fatherland for All) party, and 65 will be from the opposition Coalition for Democratic Unity (MUD).

The current parliament is composed almost exclusively of Chávez supporters, as it has been since 2005, when the opposition boycotted the parliamentary elections alleging distrust of the electoral authorities (although international observers found no evidence of fraud). 
The only opposition representatives at present are less than a score of lawmakers belonging to the breakaway PPT.

In September, 5.4 million voters cast their ballots for the pro-Chávez parties, while MUD received 5.3 million votes, and the PPT and small centrist opposition (the word “opposition” in this context is highly debatable. Editor) groups collected another 600,000 votes. The popular vote is not proportionally reflected in the new parliament because of the complex electoral laws, which combine first-past-the-post and closed-party-list voting systems.

Leopoldo Puchi, former family minister (1999-2000) during Chávez’s first term, told IPS: “The result was a protest vote reflecting disapproval of the government’s mistakes, but the government’s revolutionary plans for property seizure continue apace, although here the error is the failure to clarify exactly what sectors and what size companies will be affected.” 
Agroisleña, scheduled for takeover, was founded in 1958 by migrants from Spain’s Canary Islands. It provides farming credits and sells seeds, fertilizers and other agricultural inputs.

“The magnitude of this company, which sells half the seed sown in 20 of the country’s 24 states, and finances 18,000 producers, means that the state will consolidate its control over the entire agricultural sector,” Sierra said. (How can a country allow a company funded by foreign capital to have such power over its food sovereignty and security? The US would not allow a Russian company, for example, to have control of seed distribution in 80% of the mid west. Editor).

Chávez accused Agroisleña of overpricing its seeds and speculating with the prices of its seeds and fertilizers. “That’s enough, it is over. Now it will be the property of the people, the property of the nation,” he said. When he was told that the firm’s workers were asking for the measure to be revoked, he said: “They can protest, it is their right, but they are still expropriated.”

Meanwhile the company “absolutely and categorically” rejected the state takeover. “We find it hard to believe that a company like Agroisleña could come to be expropriated and the only explanation we can imagine is that the president of the republic has been inadequately informed,” it said in a communiqué Monday.

The owners of Agroisleña, heirs of the Spanish founders, have initiated contacts with Madrid, requesting the good offices of the Spanish government to protect their interests.

Along with the nationalization of the remaining land owned by the Vestey Group beef firm, four of whose farms were taken over by the state in 2005, Chávez called for redoubling the “struggle against huge estates (latifundios)” in lowland areas like those around lake Maracaibo in the northwest, a region that voted overwhelmingly in favor of the opposition in the parliamentary elections.

Eduardo Gómez and José Manuel Pérez, agribusinessmen elected lawmakers for MUD, criticized “the expropriation of companies that make national production possible” Monday, saying the move “favors companies in countries where we purchase food,” such as Argentina, Brazil, Colombia, Nicaragua and Uruguay.

According to private sector statistics, Venezuela imports close to 70 percent of the food consumed by the population. (These days it is less than 60%. Editor)

A company can be expropriated for the public good, admitted Pérez, but he asked, “what is the plan for Agroisleña?”

The latest expropriations were accompanied by announcements by the president of new housing program, to address the housing shortage, still a major concern among Venezuelans. Chávez also repeated calls to “banish bureaucracy and inefficiency” in the state apparatus.

PSUV leaders ruled out the idea of seeking dialogue with the opposition once the new parliament is seated in early January. Instead, they indicated that outgoing lawmakers will pass new “revolutionary laws” in the next few weeks.

According to Puchi, “it was never really on the cards that Chávez would change course, even if the opposition had won more seats in parliament.” “His government plan is still in force, however surprising or improvised its measures, like the state takeovers of land and companies may appear,” he added.

Sierra, for his part, said “Chávez’s approach is one of confrontation, which is why he antagonizes political and economic sectors that oppose him…Revolutions cannot be halted, and he believes that he is leading a revolution.”

The other side of the coin in Venezuela’s seemingly endless political conflict is that, according to Sierra, anti-Chávez sectors believe “they achieved a political victory Sept. 26, although it is not reflected in the number of their lawmakers in parliament.

“With the relative success it enjoyed Sept. 26, the opposition is clearing its own pathway towards challenging and trying to beat Chávez in December 2012,” when presidential elections will be held for the 2013-2019 six-year term, he said.

Puchi does not rule out the possibility of circumscribed agreements on specific matters in parliament, “but what we will most probably see will be politicians confronting each other in parliament while, outside, social protests by disgruntled sectors of the population will continue if they are dissatisfied by the government’s actions, as they have been dissatisfied over the last two years.”