Venezuela Expands Regulation of Food Production

Caracas, February 14, 2007 (— Maria Cristina Iglesias, the Minister of Light Industry and Commerce and Elias Jaua, the Minister of Agriculture and Land, announced yesterday that the government will begin regulating all prices in the production chain of meat. Also, it is allowing an increase in the offical price of eggs and milk, so as to improve production and distribution of these products, and Chavez announced that food distributors could be nationalized if they resist these newest measures.

Over the past week serious problems had developed where supermarkets refused to sell red meat because the price controls were too low for them to make a profit, said the stores.

Iglesias announced yesterday that as of Wednesday new prices would be in effect, which will raise the official price for meat by 38%. This is, however, still lower than the unofficial price which had been as much as double the regulated price of meat. According to Iglesias the new price would be 29% lower than the current market price.

Other price increases that will take effect today are for chicken, eggs, and milk. There has been a shortage of fresh whole milk for several months already because milk producers say they cannot sell the milk at the regulated price. Instead, they have been selling skim milk, whose price is not regulated.

With regard to red meat production, Iglesias said that the prices for the entire production chain will be regulated, "from the producer to the final consumer." "There is an excessive profit margin in the case of meat packers," added Iglesias. She also said the government would be "absolutely exacting in the compliance" with the price regulations.

She also warned that should the production chain be interrupted at any point, such as due to hoarding or price speculation, "the national government, together with the Bolivarian people would have to reestablish the chain in its totality." She urged that the communal councils, the community associations that have been created throughout the country in the past year, pay particular attention to problems in the food production and distribution process.

Agriculture Minister Jaua specified that the prices of various agricultural services, such as food transport from farms to distributors, would also be regulated. According to Jaua the current lack of sufficient transport during the harvest time is causing transportation prices to shoot up.

Chavez: Food Distribution Could be nationalized

During an event in which retirees were to receive their retirement benefits, President Hugo Chavez warned the meat packing industry that they could be nationalized if they are caught hoarding meat.

"The larger you are, the greater care you should take with Chavez. If we have to intervene and nationalize, just wait a few hours… I will be very attentive from now on," said Chavez.

Apparently some distributors are engaging in a boycott, said Chavez, but in such a situation the government would engage in a "counter-boycott" and in the end "ours will be the victory because we are right."

"A supplier that sells meat above the regulated price we will intervene and give to a communal council," said Chavez, adding that the councils would probably not engage in price gouging.

Chavez’s and his minister’s announcements today and yesterday closely followed an announcement on Monday that meat would be exempt from sales tax from now on and that there would be new subsidies for agricultural production. Also, Iglesias had already announced on Monday that the government is working on two law-decrees, to be passed under Chavez’s recently approved authority to pass such decrees, which would protect against problems in the food supply.

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