Want to sell your rice for a cost higher than the government thinks you should? Or slow production to a pace lower than the government’s ideal? Try that in Venezuela, and you’ll have Hugo Chavez’ troops at your company’s doorstep.
On Saturday, Venezuela’s dictator gave orders to the military to “take control” of all rice-processing mills in the country, including some US-owned plants such as the Minnesota-based Cargill. Chavez has been enforcing price caps on food commodities since 2003, and is angered by the rice companies’ recent decisions to reduce production rates in order to catch up on lost profits.
“I don’t have any problem expropriating”, Chavez declared over the weekend, warning that any plants which resist the military intervention by stalling rice production would be “permanently seized.” Yesterday, he followed through on his threat and ordered Venezuela’s Agricultural Minister to “prepare the [expropriation] decree” against Cargill.
Chavez also took action against Empresas Polar, a Venezuelan-owned food producer that ranks as the nation’s largest. Unhappy that their rice mill has been operating under government-enforced production rates, the dictator vowed to nationalize Empresas Polar unless they began producing at top capacity. These are not empty words, considering that Chavez has already confiscated the private ownership of various utilities and manufacturing operations throughout the country.
“These private businesses can continue functioning, as long as they remain within the scope of the law”, Chavez said. Despite the price caps and other laws, Venezuela’s inflation rate is currently at 31%, the worst of all South American nations.
Image via Neogabox on Flickr under a Creative Commons license