Against the backdrop of the disclosure that Venezuela will no longer be acquiring rice from Guyana under the PetroCaribe Agreement after November this year, it has been disclosed that as part of the alternative arrangements being made by the Maduro administration to fill the demand gap, rice farmers in the economically challenged Bolivarian Republic will be required to sell between 30% and 100% of their output to official state outlets.
According to a report in the Telegraph, producers of milk, pasta, oil, sugar and flour have also been asked to sell their output to the state.
Sustained food shortages in Venezuela are unlikely to be helped by a precipitate decision by the Maduro administration to jettison the arrangement under the 2009 PetroCaribe deal through which more than 200,000 tonnes of rice is supplied to Venezuela. The decision follows fresh acrimonious exchanges between the two countries after Venezuela moved to restate its long-standing territorial claim against Guyana in the wake of the announcement by the American company Exxon-Mobil of a significant oil find.
The report on the Venezuelan government’s decision to redirect privately produced rice and other commodities to state-controlled food distribution outlets has reportedly come under criticism from the business community on the grounds that there are too few state stores to handle what, in effect, is a huge distribution challenge. “People may have to travel several kilometers to reach a state store and wait in the queues for longer times,” the report said.
The decision, according to a senior official of the Venezuelan Food Industry Chamber, is unlikely to be effective in helping to address food shortages since “traders are likely to resort to hoarding by buying from the state owned shops and then reselling at higher profits.” There are also questions as to whether the government had discussed the plan with the Chamber before implementing it.
The article noted that while the Maduro administration had gone ahead and jettisoned the rice supply arrangement with Guyana under the PetroCaribe deal, rigid currency controls “make it very difficult for traders to import rice and other goods.”
The Maduro government is reportedly engaged in talks with Uruguay to secure a new rice import deal.
