Archive for June 27th, 2010

Another look at how Chavismo tries to “manage” food imports and distribution

June 27, 2010

(Milk packages with expired dates on them)

Both El Nacional (page A-6 by subscription) and El Universal have articles today about the failure of the Government’s food import policy. The amazing thing is that some of the data used by both newspapers  is taken right our of reports by the Government, and in the case of PDVAL it is from a recent PDVAl report.

According to the PDVAL report, in 2008 PDVAL imported 597,000 Tons of food, which triples its distribution capacity. Thus, the 120,000 Tons of spoiled food represents about 20% of what was imported in 2008, not an insignificant amount as the Dictator would like you to believe.

According to the report, the amount of food purchased was not decided by PDVAL, but was an order by Cenbal, the National Center For Feeding Balance, an organization I have never heard of, but which reports to the Vice-Presidency of the country. Cenbal is composed of representatives from the Ministry of Agriculture, Commerce, and you guessed it, Cuban advisors, who now seem to have shifted from advising on how to produce food on how to import it.

Cenbal itself imported, via various mechanisms a total of 1.7 million Tons of food. The idea, was to import the food to guarantee supply and even sell it to the private sector, something that was never done. The report also says that it was the Cubans that advised PDVAL on how much to buy, the scheduling and the permissions needed for items. Most of the food imported via PDVSA’s Bariven import company was bought via competitive bidding, except when it was purchased using Government to Government agreements. (Think Argentina and China)

The report says that the bottleneck for all these imports was simply the ports which were unprepared for this magnitude of imports .Similarly, it blames the tax office, the lack of storage facilities and the delays in obtaining permits for the problems. So much for trying to blame the private sector!

Clearly the Government’s strategy was to import so much food to guarantee that there would be no shortages, but nobody was taking into account how much could actually be brought in into the country within a time period and the Government’s buerocracy was itself to blame for the problems.

The article in El Universal looks at the evolution of food imports and food production in the last few years. It concludes we have gone from importing 70 dollars per inhabitant a year to US$ 392 per inhabitant per year, which represents the need of importing US$ 14.3 billion per year in food. Thus, all of the BS about sovereignty, endogenous development and the like was Mr. Chavez BS.

Then the article gives examples, such as the fact that the country imports 90% of the black beans we eat, half the meat and  70% of the rice. Up to 2003, Venezuela was self-sufficient in meat, importing about 1% of its needs, but then the Chavez administration began regulating prices and local producers could not compete with the cheap Government imports.In 1998, Venezuela produced 407,000 Tons of meat, which is now down to 269,000 Tons with imports reaching 395,000 Tons.

In milk, the story is not too different. In 1998, 67% was local production, today 67% is imported. In 2008 and 2009, imports were over 100% of consumption, which also explains some of the problems with the putrid food.

While all this happens, report El Nacional, the Comptroller, contradicts himself day after day. First he said that he was investigating the food imports for the last two years. Then he said he was doing t, but did not know that some of the food was going bad, but it turns out that in his own report t the National Assembly, the Comptroller reports the containers of spoiled or expired food. It turns out that it is  cheaper to buy food about to expire and that may be part of the problem. The Comptroller reports even food packages with two expiration dates in the same package, suggesting tampering.

There you have it, Chavez knows how incompetent and inefficient his Government is that he manages the country trying to import too much, distributing too much and spening too much in the hope that there wll not be shortages and his popularity does not decline.

But in the end we have the same story: waste, corruption and inefficiency dominate and we Venezuelans pay for the Dictator’s follies.

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