Venezuela campaign: How nationalisation caused food shortages in Venezuela

Venezuela is currently in the grip of a devastating food shortage. Reports estimate that in 2017 the average Venezuelan lost an average of 12kg, following a 9kg weight loss the previous year. 60% of Venezuelans said they woke up feeling hungry each day.

Nationalisation, a key policy of the Venezuelan regime, is an important cause of the hunger. Also called expropriation, it was applied to every aspect of the food chain from basic agriculture to food processing and retailers.

Chavez introduced a Land Law in 2001 permitting the expropriation of agricultural land. Seized estates were turned over to co-operatives and regime supporters. The new farmers lacked the technical know-how, management skills and capital necessary to maintain production. Moreover, as state retained title to the land, the regime would repossess it if the new farmers did not continue their political support. By 2010, the government had seized 20% of the agricultural land in Venezuela. The remaining private farmers do not invest in their farms for fear of expropriation.

These expropriations destroyed Venezuela’s agricultural capacity. According to the National Confederacy of Agriculture and Livestock Associations, agricultural productivity dropped sharply from 2007 to 2011. Maize production fell by 40.3%; rice by 38.9%; sugar by 33.6%; coffee by 46.5%; potatoes by 63.5%; tomatoes by 31.0%; and onions by 24.6%. Livestock farming was also devastated. Beef and veal production have dropped by 75% between 1998 and 2014.

Nationalisation also affected Venezuela’s food processors. The government expropriated 18 of the 27 plants producing the staple corn flour. All are now making a loss and are in various stages of collapse. One of the most egregious nationalisation cases is the Cariaco Sugar Plant: within two years of being nationalised it was only producing at 11% of its previous production levels. The Ezequiel Zamora Sugar Plant, started in 2002 as a new state enterprise by Chavez in his home state, has cost a huge amount but is largely in ruins and barely producing any sugar. Workers in nationalised food-processing firms who protest the situation are treated with no mercy. In February this year, the regime arrested several trade union leaders at the Lacteos Los Andes “Hugo Chavez” plant in Cabudare who protested corrupt and incompetent management.

Chavez also nationalised food retailers, such as the large supermarket chains Exito and Cada in 2010.  These were turned into a state-owned operation called Bicentennial Supplies that by 2017 had largely collapsed, with 60% of its shops shut and 6,000 of its 9,000 workers dismissed.

Of course, nationalisation is not the only cause of food shortages in Venezuela. Price controls forced businesses to operate at a loss or shut down. Three-quarters of private businesses in Venezuela have ceased to operate as of 2018. Venezuela now imports 70% of its food and people are reliant on inadequate government handouts. To rescue the situation drastic measures are needed. To prevent a famine the Venezuelan government must abolish price controls and end expropriations. Only then will hunger be relieved.

More information on the Venezuela Campaign can be found on their website.