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  1. RightHand

    RightHand Pioneer in a New World Moderator Founding Member

    Venezuela's Chavez sends troops to rice firms
    Move comes amid soaring inflation and persisting reports of food shortages
    The Associated Press
    updated 7:44 a.m. ET, Sun., March. 1, 2009
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    CARACAS, Venezuela - President Hugo Chavez on Saturday ordered troops to temporarily seize control of all Venezuelan rice processing plants to ensure they produce at full capacity amid soaring inflation and persisting reports of food shortages.

    Chavez told the National Guard to "take control of and intervene in all of these businesses that process rice in Venezuela," including at least a half-dozen local and foreign private companies.

    "This government is here to protect the people, not the bourgeoisie or the rich," Chavez said, accusing some companies of slowing production to evade price caps that have slashed their profit margins. He did not say what the takeover would involve or how long it would last.

    Chavez imposed price caps on scores of basic foodstuffs including chicken, rice and sugar in 2003 to combat rising inflation, which at 31 percent is now Latin America's highest. He last raised rice prices a year ago to just over $1 per kilogram ($0.46 a pound).

    'The first measure'
    Agriculture Minister Elias Jaua said troops would occupy company installations as "the first measure" in an unspecified takeover process, beginning with a rice plant owned by Empresas Polar, the country's largest food producer.

    Polar's Primor-brand rice plant, located in the western state of Guarico, has been operating at less than 50 percent capacity in violation of federal regulations, according to Vice Minister of Agriculture Richard Canan. He said the government would guarantee maximum output at the plant.

    Guillermo Bolinaga, Polar's legal director, could not be reached for comment on Saturday, but he strongly denied similar claims made by Venezuela's consumer protection agency on Friday. The agency suspended operations at the Guarico plant last week, accusing it of hoarding rice, Caracas' El Universal newspaper reported.

    Other major rice producers operating in Venezuela include Minneapolis-based Cargill, which owns the Santa Ana Rice Plant in Portuguesa state. Jaua said Caracas-based Corporacion Mary, which produces four types of rice under the brand name "Arroz Mary," will be affected.

    Chavez often threatens food suppliers he has accused of hoarding goods to sell on the black market for higher prices or waiting until price caps are raised. He first set his sights on Polar last year, calling it a "clear example" of the kind of business that is ripe for takeover.

    On Saturday, Chavez warned that any rice processing company that threatened to halt output would be permanently seized by the government.
    "I don't have any problem expropriating," he said. "And I'll pay them with paper, too. Don't think I'll pay them with hard cash."

    In the past two years, Chavez has nationalized four major oil projects and some of the country's biggest electricity, telecommunications, steel and cement companies.
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