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Home / World

Oil-rich land short of milk and honey

By Ian James
23 Nov, 2007 04:00 PM4 mins to read

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Venezuelans face shortages despite the promises of a rosy future by President Hugo Chavez. Photo/ Reuters

Venezuelans face shortages despite the promises of a rosy future by President Hugo Chavez. Photo/ Reuters

KEY POINTS:

The lines formed at dawn and remained long throughout the day - hundreds upon hundreds of Venezuelans queuing up to buy scarce milk, chicken and sugar at state-run outdoor markets staffed by soldiers in fatigues.

President Hugo Chavez's Government is trying to cope with scattered shortages of some
foods, and long lines at state-run "megamercal" street markets show many Venezuelans are willing to wait for hours to snap up a handful of products they seldom find in supermarkets.

"You have to get in line and you have to be lucky," said Maria Fernandez, a 64-year-old housewife who was buying milk and chicken.

She said trying to find milk was a constant frustration. She had almost managed to get powdered milk at a private supermarket - only to watch someone else walk away with the last can.

The long lines for basic foods at subsidised prices are paradoxical for an oil-rich nation that in many ways is a land of plenty. Shopping malls are bustling, new car sales are booming and privately owned supermarkets are stocked with American potato chips, French wines and Swiss gruyere cheese.

Yet other foods covered by price controls - eggs, fresh chicken - periodically are hard to find in supermarkets. Fresh milk has become a luxury and even baby formula is scarcer nowadays.

The shortages are prompting some Venezuelans to question Chavez's economic policies while he campaigns for constitutional changes that, if approved in a December 2 referendum, would let him run for re-election indefinitely.

Some government officials accuse producers of holding basic goods off the market to profiteer or to sow discontent among Venezuela's poor, Chavez's core supporters.

Economists say the reasons are numerous, including surging demand due to economic growth.

The Government's price controls were also "totally divorced" from reality - in some cases below production costs - making it unprofitable for suppliers to sell their products at official prices, said economist Pedro Palma of the Caracas consulting firm MetroEconomica.

More investment was needed in agriculture but the Government's agrarian reform effort - assuming control of vast farmlands and offering them to poor farmers - had made traditional producers reluctant to invest, he said.

And importers also face hurdles. Currency exchange controls imposed in 2003 by the Government require state approval to obtain US dollars at the official rate. Those without approval regularly turn to the black market, buying US dollars for about three times the fixed rate.

To compound the problems, Palma said, some of the products Venezuela was importing, such as milk and sugar, were scarce internationally.

Many of those in line at the megamercal said they were grateful to Chavez for subsidised markets offering prices far cheaper than commercial supermarkets.

But they also complained of struggling to find milk, chicken, sugar and cooking oil elsewhere at prices set by the Government.

"I arrived at 6 in the morning to get in line," said Doris Bastida, 32, a mother of four who wheeled an infant son in a stroller. She had been waiting for about four hours by the time she reached the entrance.

"What am I going to do? I don't have anywhere else to go," she said. Powdered milk is sold by black-market street vendors at US$10 ($13.26) or more per kilogram - about twice the regulated price and four times the price offered by the state markets.

Bastida said she still believed in Chavez and planned to vote in favour of his reforms "so that things will get better".

Others, speaking in hushed tones, said they saw Chavez's Government as a failure and did not want him to be able to run again in 2012.

"We have to vote 'no',", said 50-year-old Fatima Rodriguez. "Do you think it's good to be here waiting in line?"

Chavez says he is aiming to boost agriculture with projects including state-supported sugar harvesting and a milk-processing plant started with help from Iran. For now, Venezuela still imports most of its food, and imports overall have more than doubled in the past three years.

The Food Minister, General Rafael Oropeza, said the open-air markets were fully stocked across the country over the weekend. He said leg of pork - a popular holiday dish - was imported because local suppliers declined to participate.

At one state market in Caracas, the line snaked around a block, while soldiers manned barricades at the entrance. A banner hung above read "Continue on with Chavez." Red campaign signs plastered on walls urged: "Yes, with Chavez".

Factory worker Eugenio Ruiz praised Chavez for the subsidised food and said he planned to vote "yes" so that Chavez could run again.

"Look at all he's done for us," Ruiz said, explaining he thinks the situation would be worse without Chavez. "We have to stay with him, not abandon him."

- AP

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