Venezuela Seizes US Rice Producer

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Venezuela Seizes US Rice Producer


Mr Chavez has accused rice producers of sidestepping quotas

Venezuelan President Hugo Chavez has ordered the expropriation of a rice mill, amid a battle with food companies over price regulation.

Mr Chavez said the mill, owned by a subsidiary of US food giant Cargill, was not distributing rice at government-set prices.

He also threatened to nationalise the country's largest food processor and private company, Polar.

Venezuela has already set quotas and prices for 12 basic foods.

Under the measure, 80% of all rice produced must be basic white rice. The measure also includes 95% of all cooking oil, coffee and sugar.

Producers of items such as powdered milk, cheese and tomato sauce are also affected.

'Intolerable'

Last week President Chavez ordered troops to rice processing plants after accusing producers of sidestepping the law on controlled prices by producing a higher grade of rice.

Cargill, which operates one rice-processing plant in Venezuela, said the mill does not produce the plain rice that is under regulation.

"Prepare the decree, we are going to expropriate Cargill. We are not going to tolerate this," Mr Chavez said.

Mr Chavez is attempting to reduce the cost of the basic shopping basket of ordinary Venezuelans at a time of soaring inflation, says the BBC's Will Grant in Caracas.

But business leaders and food producers are furious at what they see as a further attack on their ability to turn a profit, our correspondent says.

The move against Cargill is unlikely to be viewed favourably in Washington either, which angered Venezuela last month by criticising its human rights record, our correspondent adds.

Story from BBC NEWS:

[American Patriot]

The move against Cargill is unlikely to be viewed favourably in Washington either, which angered Venezuela last month by criticising its human rights record, our correspondent adds.

WHATEVER!!!!!!

I seriously DOUBT the current administration will do jack about it.

[Malsua]

Zero will welcome his comrade Chavez sticking it to the corporate interests and placing the means of production under the control of the government where it belongs.

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Venezuela's Hugo Chavez tightens state control of food amid rocketing inflation and food shortages

President Hugo Chavez is tightening state control over Venezuela's food supply, setting quotas for food staples which are to be sold at government-imposed prices.

By Jeremy McDermott, Latin America Correspondent
Last Updated: 11:11PM GMT 06 Mar 2009


Hugo Chavez is seeking to ensure that his core support, the poor, can still fill their shopping baskets with food Photo: REUTERS

Venezuela's public finances are unravelling, with oil prices at $40 a barrel, while the national budget is calculated at $60 a barrel. Inflation is running at over 30 per cent, yet with the new measures Mr Chavez is seeking to ensure that his core support, the poor, can still fill their shopping baskets with food.

"If any industry wants to ride roughshod over the consumers, with a view to getting better dividends, we are going to act," said Carlos Osorio, the national superintendent of silos and storage. "For the government, access to food is a matter of national security."

Production quotas and prices have now been set for cooking oil, white rice, sugar, coffee, flour, margarine, pasta, cheeses and tomato sauce.

White rice, the staple for many Venezuelans, can now only be sold at a price of 2.15 bolivares (.07p) per kilo. Private companies insist that production of that kilo costs 4.41 bolivares (.14p) and that government regulations are impossible to fulfil and companies will quickly go broke.

Companies that are dedicated to rice production must ensure that 80 per cent of their efforts are dedicated to white rice. The new regulations set production percentages, as companies were rebranding their products to avoid the government controls, like flavouring the rice, as the price restrictions apply only to white rice.

"Forcing companies to produce rice at a loss will not resolve the situation, simply make it worse," said Luis Carmona of Polar, a rice company that has been singled out by the government for trying to sidestep restrictions.

Government price controls on basic goods have been in place, in various forms, since 2003. But the restrictions have forced Venezuela to become increasingly reliant on imports of these products as local farmers will not supply the selected food staples at government prices.

Mr Chavez last month won a referendum allowing him to stand indefinitely for re-election. With that now achieved the Venezuelan leader, who has vowed to turn his South American nation into a model Socialist state, is now taking some unpopular decisions needed to stabilise his floundering economy.