http://www.reuters.
Chavez shops to shorten Venezuela food lines
Fri May 2, 2008 12:44pm EDT
By Fabian Andres Cambero
CARACAS, May 2 (Reuters) - Venezuela's President Hugo Chavez is on a
shopping spree to combat sporadic food shortages that have dented his
popularity, using record income from oil exports to offset the impact
of global food prices.
Chavez's first election defeat in a December referendum on expanding
his powers to push through socialist reforms was blamed in part on
anger from his mainly poor supporters after basic products like milk,
sugar and eggs became hard to track down in South America's biggest oil
exporting country.
To deal with the crisis, Chavez last month bought one of Venezuela's
largest dairy companies and a chain of refrigerated storage units. He
cut red tape on imports and opened a new network of food markets run by
the state oil company PDVSA.
National Guard trucks are distributing food to the new markets, helping
shorten the long lines for groceries that became customary last year,
although products still often run out quickly.
"The queues are not like before. It's easier to find things now," said
housewife Wilma Rondon, buying at a temporary government market newly
opened in a poor Caracas neighborhood.
In his 10th year in office and after a long spell of high popularity,
Chavez is keenly aware that he may lose important states and the
capital in November elections for mayors and governors if he does not
tackle the day-to-day issues affecting his supporters.
Polling firm Datanalisis say Venezuelans' now consider food shortages
their second most serious concern after high crime.
Last year's shortages were caused by a rapid increase in demand as
consumers spent their share of the biggest oil bonanza the country has
seen since the 1970s, along with supply chain distortions caused by
strict price controls.
Venezuela's farming sector is small and could not keep up, while poor
government planning and arbitrary rules meant international companies
like Nestle and Parmalat struggled to get imported milk through ports.
The government also blames sabotage and hoarding by business elites
opposed to Chavez.
DISTORTIONS
Price controls on many foods encouraged farmers to sell crops in
Colombia, where prices are higher. At home, many dairy farms sold milk
to cheese makers, because cheese prices are controlled less than liquid
milk.
To combat these distortions, Chavez bought dairy company Lacteos Los
Andes and diverted milk previously used for yogurt to fresh milk.
"We acquired the plant and put it at the service of the people,"
Mauricio Herrera, the president of the newly nationalized company, told
Reuters.
As one of the world's top oil exporters, Venezuela is flush with cash
from record crude prices. Although most of the country's food is
imported, the government can blunt the increases in world food prices
with subsidies for the poor.
Chavez last week announced higher subsidies for farmers to boost
harvests of grains like corn. He is investing in the countryside and
aims to make Venezuela a net food exporter, a goal complicated by poor
government planning and a strong currency.
The government still has a way to go before it can claim to have
completely ended the bottlenecks in food supplies, and some consumers
are now complaining that car parts and some types of paper are harder
to find.
"It's not that there are more shortages, but people are more sensitive
now," said Datanalisis director Luis Vicente Leon. (Additional
reporting by Enrique Andres Pretel; Writing by Frank Jack Daniel;
Editing by Kieran Murray)
© Thomson Reuters 2008.
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