April 30, 2008 / 12:09 AM / 10 years ago

Missteps as Venezuela's Hugo Chavez backs farming

MANTECAL, Venezuela (Reuters) - Deep in Venezuela’s sweltering heartland, a gleaming dairy plant sits idle, a testament to missteps that slow President Hugo Chavez’s drive to make his oil nation self-sufficient in food.

<p>A worker stands at a production line in the recently nationalized milk plant Los Andes in Barquisimeto in this April 22, 2008 file photo. Venezuelan President Hugo Chavez's government bought Los Andes, one of the country's largest milk companies, last month in an effort to aid the oil-producing nation during the food crisis, officials said. REUTERS/Jorge Silva/Files</p>

Dozens of workers in yellow rubber boots sluice water to keep metal pipes clean, ready to churn out pasteurized milk and cheese, but the site has barely operated since a team of Iranian technicians built it 10 months ago.

What may seem an obvious obstacle has yet to be overcome -- too few dairy cows are raised in the harsh plains where the plant is located to provide enough milk to keeping it running.

“It’s like they put their pants on before their underwear,” said Humberto Taquiva, a cobbler who is also an agricultural adviser in the tiny plains town of Mantecal, trying to persuade farmers to produce milk for the plant.

With world food prices at all-time highs and hurt by sporadic shortages of basic products last year, Chavez is determined to reduce Venezuela’s dependence on costly imports and make its fields more productive.

“Some day Venezuela will export food,” the leftist president said April 24 during a visit to a newly irrigated corn farm in the neighboring state of Barinas, where new tractors worked the land. “Output keeps on rising.”

OIL EXPORTER, FOOD IMPORTER

Venezuela is a lush country but agriculture collapsed when oil crowded out coffee and cocoa farms in the 1920s.

The OPEC member is now one of Latin America’s few net food importers. Oil wealth contributes to a strong currency, meaning imports are often cheaper than home produce.

There is little doubt Chavez is paying more attention to the countryside than any government in a generation. Harvests of many crops have risen steadily since he took office.

“It was totally abandoned,” said peasant farmer leader Andres Tuesta. “This is a serious attempt to break with a model based only on oil and diversify the economy.”

But cases like the empty plant in the tiny town of Mantecal show bad planning, along with an overvalued currency, have slowed Chavez’s drive to make the fertile land produce more.

Food shortages are a tinderbox issue everywhere in the world, as unrest from Haiti to Senegal has shown in recent months. Anger at long lines for milk contributed to Chavez’s defeat in a referendum on extending his powers last year.

Venezuela has promised to help other left-leaning governments in the region -- such as Bolivia, Nicaragua and Cuba -- to boost their production of grains, but it has run into difficulties at home.

Chavez, who says high food prices show capitalism is a failed system, has sheltered consumers from rising world food costs with subsidies and price controls.

Even so, some products have been scarce as world supplies tighten, fixed prices distort the supply chain and a bonanza from record oil prices drives up domestic demand.

Worried by the shortages, Chavez this year cut red tape on imports and opened state-run food stores. The lines shrank.

‘WHITE ELEPHANT’ WHERE JAGUARS ROAM

The government bought one of the country’s largest milk companies last month to stem a common practice by farmers of selling milk for cheese, which is subject to fewer price controls than milk, or shipping it to neighboring Colombia.

Chavez is trying to create new dairy regions at sites such as Mantecal. He aims to double national output by 2012.

Mantecal is in the sparsely populated state of Apure, which has several times more cattle than people but whose ranchers, including the Vestey Group, owned by Britain’s Vestey family, have traditionally stuck to producing cattle for meat.

Its hot, swampy flatlands are inhospitable to the average dairy cow and locals were taken aback when an Iranian team arrived last year to install the plant in their town.

“They didn’t do the financing part, the training, the establishing of pastures or the infrastructure to guarantee the production to supply the plant,” Taquiva said, a note of exasperation in his voice.

In an area where anacondas and piranhas fill rivers, sweltering heat and vicious bugs will knock down high-yield European cows, which are also prey for roaming jaguars.

Chavez says he wants to put industrial plants in remote areas to spread wealth across the Caribbean nation.

But the white elephant raises shrugs in Mantecal wherever it is mentioned. Nobody seems to know why it was built.

Stories of similar shortsightedness abound in Chavez’s self-styled revolution, such as the project in the state of Lara where farmers grow tomatoes but roads from villages are so bad they cannot get them to market in good condition.

“IN DEBT WITHOUT A CROP”

Tuesta, the peasant leader, helped organize Venezuela’s farmers to receive land redistributed by Chavez’s government under an agrarian reform in the last several years. Although he is a supporter of Chavez, he says there is a long way to go before Venezuela becomes self sufficient in food.

He blames the shortages on sabotage and hoarding by Venezuelan elites opposed to Chavez, but corruption and bureaucracy have also slowed production increases.

“You ask for a credit in December and it comes in June, after the planting season. You end up in debt and without a crop, the worst of both worlds,” he said in a sparse office, decorated with maps of the countryside.

Speaking in Brazil last month, Chavez said he is committed to making underdeveloped states like Apure major milk producers.

Tougher breeds of cattle are being tested and the government plans to introduce water buffalo -- which are commonly used in Brazil to produce milk -- on the 45,000 acre (18,000 hectare) San Francisco ranch near Mantecal.

But after two years in planning, there are no buffalo, and even Chavez acknowledges the problems. “We’ve got some great projects, but we’re still missing a ton of things.”

Reporting by Frank Jack Daniel; Editing by Frank McGurty and Eddie Evans

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