Venezuela: Struggle against food shortages continues, Chavez expropriates US rice processing plant

Part of the reactionary Venezuelan oligarchy’s campaign to destabilise and overthrow the Chavez government is a systematic hoarding and sabotage in the food industry, most of which they control. However, recently we have seen Chavez take measures involving state intervention in some of the key food processing companies. This is a step in the right direction, but must be followed up by widespread expropriation of the whole of the food industry, the land and industry.

Throughout 2007 and 2008 scarcity of basic food products has been part of everyday life for millions of Venezuelans. Sometimes it has been coffee, other times sugar, milk, rice, cooking oil or beans that were unavailable on the shelves of super-markets and shops. This has created a potentially dangerous situation which could undermine support for the Bolivarian government. (For a detailed account, see Erik Deemester's article)

Polar, mainly known for being one of Venezuela's largest beer producers, have been circumventing price controls by adding flavouring to their rice products. Photo by rooshv on Flickr.
Polar, mainly known for being one of Venezuela's largest beer producers, have been circumventing price controls by adding flavouring to their rice products. Photo by rooshv on Flickr.

The inability of the Venezuelan government to solve this problem played a key role in the defeat in the referendum on Constitutional reform in December 2007, where three million Chavez supporters abstained from voting. That explains why, at the beginning of 2008, a campaign was launched on the direct initiative of Chavez to solve the problem. This involved the use of the National Guard to confiscate hidden reserves of food and stop the smuggling of food into Colombia, where speculators can sell the food products at much more favourable prices.

The campaign demonstrated that food scarcity was the result of hoarding, speculation and smuggling on a massive scale. However, no effective measures were taken to deal with the root of the problem at that time. Private property of the food-producing sector was left untouched. As we warned at the time: “The seizure of food stocks by the National Guard and other bodies can temporarily ease the problem, but cannot solve it in the long term. Relying on the institutions of a state apparatus which is still a capitalist state to solve the problems of working people is like putting a fox in charge of guarding hens.” (Jorge Martín, Venezuela: the struggle against food sabotage begins, now expropriate the monopolies!) The speculation and the direct sabotage on the part of the capitalists continued.

Discovering the crux of the problem

At the end of February and beginning of March a very interesting development took place. The INDEPABIS (National Institute in Defence of People’s Access to Goods and Services) is an organ designated to control the prices of consumer goods, led by the well-known left-winger Eduardo Samán who has just recently been appointed by Chavez as the new Minister of Trade.

In February, INDEPABIS conducted a number of investigations of private companies in the food sector. In a rice processing plant in Guarico state, owned by the country's largest food producer, Polar, it was revealed that the plant was only working at half capacity. Furthermore, the plant was adding artificial flavouring to 90% of its rice in order to get around the price controls decreed by he government, which only apply to essential, unenhanced food items.

While the official controlled price of rice per kilogram is 2.33 Bolivars, the artificially flavoured rice can be sold at twice the price or more. This clearly indicates that the owners of Polar and other companies are doing everything to squeeze maximum profits out of wage labour, avoiding all price controls and regulations implemented by the government.

On Saturday, February 28, Chavez decreed state intervention at the rice processing plant in Guárico, which is to run for 90 days. The workers at the plant have supported this measure with great enthusiasm and have begun to produce 100% unmodified rice. This shows that it is entirely possible to mass produce cheap rice as long as it is done under the control of the working class.

While the management of Polar claimed that the workers had been “forced” to produce at 100% capacity by the state, Frank Quijada, national leader of the Socialist trade-union of Polar workers, Sintraceliv, dismissed this and explained that the workers backed the state intervention as a “measure to help the poor people.”

Chavez expropriates multinational food producer Cargill

Having discovered this deliberate sabotage, Chavez emphasized that this was only the tip of the iceberg. On his TV programme, Aló Presidente, on March 1, he threatened the capitalists in the food sector. If the sabotage continues, he said, “we will expropriate all of their plants, and convert them from private property into social property.” Meanwhile, INDEPABIS continued to investigate rice-plants in Portuguesa and other states.

On Wednesday, March 3, Chavez announced the expropriation of the rice plants of Cargill, a US owned multinational food company.
On Wednesday, March 3, Chavez announced the expropriation of the rice plants of Cargill, a US owned multinational food company.

Then on Wednesday, March 3, Chavez announced the expropriation of the rice plants of Cargill, a US owned multinational food company. It was revealed that this rice-processing plant in Portuguesa was adding artificial flavouring to all of its rice to get round the price controls. Apart from that, INDEPABIS found approximately 18,000 tons of non-modified rice stored in the plant’s warehouse.

Chavez signed the official decree of expropriation of Cargill's rice plants on March 6. In the same speech he stated that in the past, the Oligarchy had been making the laws but that this era had now ended and “Now Venezuela has a government that only abides by the constitution and the people”. On Sunday, March 7, during his weekly Alo Presidente programme, Chavez replied to the criticisms on the part of Polar group owner Lorenzo Mendoza, and warned, “my hand will not shake when it comes to expropriating the whole of the Polar group if they are found to be breaking the law. Let this be a warning to the bourgeoisie as a whole: my hand will not shake,” adding, “And I would have the full support of the people.”

In what was a very radical speech, president Chavez also dismissed those who advocate the need to conciliate with the ruling class. “Some are trying to tell a tale that we have a technical draw, that we are neck and neck [with the opposition], this is completely false” and added, “with this story they want the revolution to surrender and that I should put my foot the brake and say: we cannot go forward, we need to reach agreements.” To these ideas he replied: “The revolution must charge ahead. There cannot be any agreement with the oligarchy or agreements at the top with anybody; I will make sure that we put our foot down on the accelerator of the Revolution.”

In the context of the present clash with the capitalists regarding food production he also mentioned the need for the National Assembly to pass the necessary laws to implement the will of the people, now that the electoral process is over. “We have an absolute majority” in the National Assembly, he said. It is now time to “dismantle the old bourgeois state, before it dismantles us”. This is completely correct, but it is also the responsibility of the workers’ movement and its leadership to take the initiative. Many opportunities have been wasted in the past. It is time to take decisive action.

Investigation of Polar and other plants

Back in 2008, Chavez warned the country's largest Food producer, Polar, that he would not hesitate to expropriate it, should it continue with its sabotage. In his latest speeches Chavez has taken up the issue again. As late as March 6, Chavez was stressing that if Polar does not comply with the laws, it will be expropriated.

On March 7, Eduardo Samán stated that he is now asking President Chavez to expropriate one of Polar's rice processing plants – the above mentioned plant in Guárico. The reason is that the management will most likely sack most of the labour force, once the 90-day state intervention is over. This is the most likely prospect, as the workers have entered into conflict with the bosses, as a result of their support for the state intervention.

However, it is not only rice plants that are being investigated. On March 6, Ultimas Noticias carried the title “Ahora le toca a las areperas” (“Now it is the arepera-producers’ turn”) on its front-page. Samán said that he wonders how Arepa [a traditional bread of maize flour] is being sold on the streets at 20 Bolivars, when the cost of production is only 1.50 Bolivars. He stressed that INDEPABIS is now investigating both the restaurants and shops that sell Arepas and also Remavenca, a producer of maize flour, owned by Polar. Samán announced that the milk processing plants would also be put under investigation to check whether they too were evading price controls.

Workers take matters into their own hands

The most striking feature of the recent developments in the struggle against food scarcity is the movement of the workers. Once the ice was broken with the state intervention in the rice-plant in Guárico, workers from the food industry all over Venezuela began to organize and call for action against the sabotage of the capitalists.

Wherever the officials of INDEPABIS have gone to investigate plants, they have been met with the support of the workers. As Juan Crespo, the national leader of Fetraharina (Trade-union federation of flour workers) which organizes more than 25,000 workers nationally, said, “It is the workers who are going to open up the companies and say, here there is speculation, here there is hoarding – if that is the case.”

On Saturday, March 7, the Minister of Agriculture and Land, Elías Jaua called on the “people to come out and occupy the means of production”, explaining that this was not a fight “between the government and this or that company” but rather, “a fight between the people and the oligarchy which creates hunger, exploits the people, and hoards produce.”

Replying to criticism from the president of the cattle-ranchers’ federation Fedenaga, Jaua said: "the president of Fedenaga pretends to be a rancher, but in fact he has a few workers who are the ones who are milking the cows. If this mister Fedenaga tries on any tricks, we will expropriate his ranch and his workers will continue to milk the cows. At the end of the day the ranch owners, do not sow anything, do not milk the cows, but rather they administer the profits that are the product of speculation and exploitation.”

In the case of the Guárico rice plant, the workers have proved that once workers’ control is adopted, production can run smoothly and fulfil the basic needs of the population. In an embryonic form this shows what could be accomplished under a Socialist plan of production discussed and decided by the workers and the people in general.

The real reasons behind Venezuela's ”food crisis”

In an article written by Jorge Martin during the first campaign of the government (February 2008), we explained the reasons for food scarcity:

“Food scarcity is the result of a combination of factors. On the one hand there is open economic sabotage on the part of the ruling class, aimed at undermining the basis of support for the Bolivarian revolution. Products are being deliberately withdrawn from the food distribution chain; scare stories are published in the capitalist media with the intention of provoking panic buying. On the other hand, the price controls and regulations, introduced by the government to try to protect working people, have squeezed profit margins for capitalist farmers, who have responded by refusing to produce or by selling their products on the black market, and also by diverting production towards products that are not regulated.

“Finally, the existence of the black market has fuelled corruption at all levels of the distribution chain, including in Mercal, where bureaucrats at different levels are diverting products from the popular markets onto the black market where they are sold at a much higher price. All these factors are added to the problems of an economy based on the export of oil, in which a parasitical capitalist class is not interested in producing for the national market, and where a large part of agriculture is concentrated in the hands of a few capitalist agro-businesses that sell their products on the world market. As a result Venezuela is forced to import 70% of its food consumption.” (Venezuela: the struggle against food sabotage begins, now expropriate the monopolies!)

The so-called “food crisis” is the result of the peculiar situation of Venezuela. On the one hand the government has not – up until now – made any big inroads into private property of the means of production, but on the other hand it is trying to impose all sorts of regulations and controls to answer the revolutionary pressure from the masses. This creates a peculiar state of affairs in the economy, where Capitalism cannot function on a “normal” basis, but where a general planning of national production is not possible either, as the basic levers of the economy remain in private hands. Added to this, and combined with this, are the above-mentioned factors: speculation, sabotage on the part of the capitalists, hoarding and the black market.

Shortages are accompanied by souring inflation. In Caracas food prices have grown by 49.9% in one year. The price of one kilogram of onions now stands at 12 Bolivars (nearly 4 euros), much more than in most Western countries (where wages are much higher than in Venezuela). The same is the case with other basic foodstuffs such as meat, cooking oil, paprika and rice. According to the National Institute of Statistics, the “canasta alimentaria normativa”, the basic minimum cost of living (or food basket), went up from 647,23 Bolivars in January 2008 to 895,06 in December 2008. And this without a simultaneous rise in wages, thus reducing the purchasing power of Venezuelan workers.

This combination between food shortages and inflation creates a very dangerous situation from the point of view of the revolution, because it hits the poorest layers of society and undermines support for the government.

In spite of the attempt on the part of the government to invest in agriculture, in order to be less dependent on imports, the situation has worsened. The land reform of the government has been quite modest and falls well short of what is required in order to fulfil the most elementary needs of the national democratic revolution. In 2001 a Land Law was passed, and even though it provoked fury among the landowners (many of whom have links with or are local agents of multinational companies), over 80% of farmland is still controlled by fewer than 5% of landowners.

The theory of the Permanent Revolution turned into reality

For decades the Venezuelan national bourgeoisie and landlords operated, and continue to operate as, a thoroughly parasitic class. Instead of using Venezuela's vast agricultural resources and its fertile soil to make the country self-sufficient in food supplies, the bourgeoisie has maintained a structure where most food products are imported from Brazil, Colombia, USA, Canada and other countries. In fact, according to official figures, food production represented less than 6% of GDP in May 2005.

The Venezuelan landowners act in accordance with the interests of the big supermarket chains which have many links with multinational food distributors and producers. For decades they have been used to administering - not producing. And this pattern continues today. In spite of attempts by the government to create alternative supermarket chains, such as Mercal and PDVAL, providing cheap food products, this has proved completely inadequate. One the one hand there are relatively few of these stores and often one has to queue up for hours. On the other hand, often many basic food products are missing in Mercal and PDVAL. There have also been cases of corruption and smuggling by bureaucrats in Mercal.

Recently, a worker at Mercal, and also a member of the PSUV, who protested against these practices was kidnapped and assassinated by unknown individuals. This underlines the bourgeois character of the state and how it cannot be used as an instrument to carry out the revolution and not even as an instrument to carry out the most minimum progressive measures. Mercal and PDVAL could function effectively if food production were under the control of the workers and the people in general. But as long as a new revolutionary state is not created and as long as the old state inherited from the IV Republic remains in place, the cancer of corruption and bureaucratism will continue to undermine the progressive plans that Chavez is trying to carry out.

The inability of the national bourgeoisie to take Venezuela forward as a nation and reduce its dependence on imports, is the main reason behind the so-called “food crisis”. It is a brilliant confirmation of the theory of the Permanent Revolution, elaborated by the Russian revolutionary Leon Trotsky in 1904. This theory, which Chavez has spoken about more than once, stresses the point that the colonial and semi-colonial countries, where the bourgeoisie entered late onto the stage of history, is incapable of fulfilling the basic tasks of the national-democratic revolution. It is bound hands and feet to the conservative landowners, to the bankers and to imperialism. There are a thousand threads that tie them together. Thus it is both utopian and reactionary to think that there is such a thing as a “nationalist, patriotic bourgeoisie” in Venezuela, which can constitute an ally in the struggle against imperialism.

More than ever before, the Venezuelan revolution is clashing head-on with private property of the means of production. Private property is an obstacle to national sovereignty in the field of food production. In order to accomplish the basic tasks of the national-democratic revolution, the working class – leading the peasantry behind it – must put itself at the head of the revolution and smash the remnants of private property and the old bourgeois state apparatus. Only in this way can an effective agrarian reform and industrialization of agriculture be introduced, which would give a huge impetus to domestic food production. And in so doing, the national-democratic revolution will grow over into the Socialist revolution. In that sense the Venezuelan revolution will become “permanent”. This is the real lesson of the present dispute over the rice fields.

There is an historical example as well, which confirms this basic postulate. In Cuba in 1959, the revolution started out as a national-democratic revolution. In fact, the initial programme of Fidel Castro's Movimiento 26-J was a programme for bourgeois democracy. But in order to achieve the most basic tasks of the national-democratic revolution, Fidel Castro came up against the interests of the landowners, the bourgeoisie and the multinationals. In fact, it was the sabotage on the part of U.S. Oil companies and sugar refineries, combined with the military intervention of imperialism, that led to the nationalization of the means of production in Cuba in 1960-61. To defend Cuba against foreign intervention and to accomplish an agrarian reform, put an end to corruption and so on, it was necessary to take control of the commanding heights of the economy and proclaim that the Cuban revolution was indeed a Socialist Revolution. There was simply no other way.

Need for a revolutionary leadership of the workers' movement

It is not at all ruled out that the same development could take place in Venezuela. However, it also depends on the leadership of the workers’ movement. For nearly three years, the UNT (National Union of Workers) has been paralysed by a criminal split between various factions that all are seeking privileges and careers instead of showing a real way forward for the movement. A particularly harmful role has been played by Orlando Chirino, whose sectarian policies led him to advocate “spoiling the ballot paper” in the recent constitutional referendum.

While the government's campaign against food shortage provides the Venezuelan trade union movement with a golden opportunity to initiate a campaign of factory occupations and for workers’ control, these so-called “leaders” are busy trying to undermine each other's positions.

Workers all over Venezuela have pushed for unity and for action. An article published on December 1, 2008 in El Universal showed that 2007 had seen the biggest growth in new trade unions for 15 years. The same article explained that strike-activity had grown by 13.6% in one year.

The beginning of 2009 has also been characterized by important struggles. Most remarkable of these has undoubtedly been the struggle in the car industry, where the Mitsubitshi and Vivex factories have been occupied by the workers. This has led to other occupations, such as at the Toyota plant. Just as in the food sector, the main feature of these struggles has been the resistance of the workers to the boycott and sabotage of the capitalists.

What needs to be done is for the UNT to launch a national campaign of factory occupations along the lines of the magnificent spontaneous movement against the bosses’ lockout in 2002-2003. This should be done in cooperation with the FNCEZ (Ezequiel Zamora National Peasants Front) organizing simultaneously occupations of the land. The government has taken steps in the right direction. The workers and peasants must respond by putting words into action.

Only with the abolition of capitalism could the Venezuelan economy really start to be planned democratically. When Trotsky was asked in 1937, how it would be possible to win the Spanish revolution, he replied in this way: “The only way possible to assure victory in Spain is to say to the peasants: ‘The Spanish soil is your soil.’ To say to the workers: ‘The Spanish factories are your factories.’ That is the only possibility to assure victory.” (The Case of Leon Trotsky). The same is true of Venezuela today!

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