Herman
1st March 2009, 21:09
Chavez Orders Takeover of Venezuelan Rice Mills (Update2)
Email (?Subject=Bloomberg%20news:%20%20Chavez%20Orders%2 0Takeover%20of%20Venezuelan%20Rice%20Mills%20%28Up date2%29%20&body=%20Chavez%20Orders%20Takeover%20of%20Venezuel an%20Rice%20Mills%20%28Update2%29%20%0D%0A%0D%0A%2 0http%3A//www.bloomberg.com/apps/news%3Fpid%3Demail_en%26refer=home%26sid%3Da4uOiko OoAqU) | Print (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) | A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#)
By Daniel Cancel
http://www.bloomberg.com/apps/data?pid=avimage&iid=ilLAZJh3BPyU
March 1 (Bloomberg) -- Venezuelan President Hugo Chavez (http://search.bloomberg.com/search?q=Hugo%0AChavez&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) sought to tighten his grip on South America’s third- largest economy as he ordered National Guard troops to seize rice-processing mills for allegedly failing to observe government price controls.
“Some companies are refusing to follow the government’s rules,” Chavez said yesterday on state television. “I’ve ordered the intervention in those industries to protect the people, not the bourgeoisie.”
Chavez warned companies attempting to stop production that they risk having their mills nationalized without compensation. Government-owned farms have increased rice production and bought new machinery, and there is no excuse for shortages of white rice, he said.
Chavez, 54, has asserted growing control over prices and production in his self-declared drive to impose socialism on the nation of 28 million. Since winning re- election to a second term in 2006, he has forced foreign oil companies into joint ventures and nationalized utilities, the cement industry, a steel mill and a bank.
“This is a process of the state absorbing different distribution and production chains that they consider strategic,” said Carlos Machado Allison, an economist at the Instituto de Estudios Superiores de Administracion, a business school in Caracas. “This will only exacerbate food inflation and drive the little private investment that’s left away.”
Price Controls
Chavez, a former Army officer, has imposed price controls for staples such as rice, pasta, cooking oil and milk in a bid to control inflation (http://www.bloomberg.com/apps/quote?ticker=VNVPIYOY%3AIND) fueled by government spending on social programs for the poor. Venezuela’s inflation rate last year was 32 percent, the highest among 78 economies tracked by Bloomberg. Food prices jumped 47 percent.
The government raided a plant owned by the country’s largest rice-processing company, Empresas Polar SA, two days ago and seized 16,000 tons of raw rice, El Nacional reported. A spokesman for Polar called the seizure “illegal and arbitrary,” the newspaper said.
The Agriculture Ministry said it would temporarily occupy rice mills to assure that the companies package the highest amount of rice for sale under price controls, El Nacional said yesterday.
Phone calls by Bloomberg News to Polar’s corporate offices weren’t answered yesterday.
Mill Takeover
Richard Canan, deputy minister at the agriculture ministry, told state television today that Polar’s rice mill has been taken over by authorities who will oversee production to assure the mill operates at full capacity and packages rice subject to state price controls.
The plant was producing 3,000 tons a month, below its full capacity of 7,000 tons a month, Canan said. The government will seek to establish norms to determine what percentage of processed rice products can be sold as flavored rice, which isn’t subject to price controls.
Agriculture Minister Elias Jaua (http://search.bloomberg.com/search?q=Elias+Jaua&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said today on state television that Polar was processing 90 percent of its rice outside of price controls and charged double for the product after adding a powder with artificial coloring and flavoring.
The Venezuelan Rice Mill Association, known as Asovema, lists 11 companies as members on its Web site, including Minnesota-based Cargill Inc.
Lisa Clemens (http://search.bloomberg.com/search?q=Lisa+Clemens&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a Cargill spokeswoman in Minnetonka, Minnesota, didn’t immediately return telephone and e-mail messages seeking comment. A security guard at Cargill’s office in Caracas said there was no one available to comment.
Unaware of Order
Rafael Torres, a supervisor at the Iancarina CA processing plant in Venezuela’s Portuguesa state, said he was unaware of Chavez’s order and that the plant was operating normally.
Asovema issued a statement expressing surprise at the measure because the industry is producing at full capacity and the government has yet to establish quotas for different types of rice, according to El Universal. The government’s action won’t increase the supply of rice in supermarkets, the statement said.
Chavez issued 26 decrees last July increasing his control over food storage and distribution and allowing the state to jail company owners for hoarding. The president, who has been in office since 1999, won a referendum Feb. 15 to abolish term limits and will run for a third, six-year term in the 2012 general elections.
Companies Object
Private business groups like Cavidea, which represents about 85 private food companies, say price controls force companies to operate at a loss.
Chavez said rice processors have been buying the raw material from local farmers but refuse to sell white rice at the controlled price. Instead, they add colors and artificial flavors to evade the controls, which apply to white rice.
“They’ve refused 100 times to process the typical rice that Venezuelans eat,” Chavez said today during his “Alo Presidente” program on state television. “I’m tired of it and if they don’t take me seriously I’ll expropriate the plants and turn them into social property from private property.”
The government will take control of a second mill, known as Arroz Mary, tomorrow, Chavez said.
Venezuela, the biggest oil exporter in the Western Hemisphere, has seen export revenue plunge along with oil prices, which are down 56 percent in the past year.
Chavez has yet to pay companies including Exxon Mobil Corp., Cemex SAB, Ternium SA, and Banco Santander SA for their assets, which Caracas-based consulting firm Ecoanalitica estimates at about $11 billion.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4GDkTtVsrFY&refer=home
Email (?Subject=Bloomberg%20news:%20%20Chavez%20Orders%2 0Takeover%20of%20Venezuelan%20Rice%20Mills%20%28Up date2%29%20&body=%20Chavez%20Orders%20Takeover%20of%20Venezuel an%20Rice%20Mills%20%28Update2%29%20%0D%0A%0D%0A%2 0http%3A//www.bloomberg.com/apps/news%3Fpid%3Demail_en%26refer=home%26sid%3Da4uOiko OoAqU) | Print (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) | A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#) A (http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a4uOikoOoAqU#)
By Daniel Cancel
http://www.bloomberg.com/apps/data?pid=avimage&iid=ilLAZJh3BPyU
March 1 (Bloomberg) -- Venezuelan President Hugo Chavez (http://search.bloomberg.com/search?q=Hugo%0AChavez&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) sought to tighten his grip on South America’s third- largest economy as he ordered National Guard troops to seize rice-processing mills for allegedly failing to observe government price controls.
“Some companies are refusing to follow the government’s rules,” Chavez said yesterday on state television. “I’ve ordered the intervention in those industries to protect the people, not the bourgeoisie.”
Chavez warned companies attempting to stop production that they risk having their mills nationalized without compensation. Government-owned farms have increased rice production and bought new machinery, and there is no excuse for shortages of white rice, he said.
Chavez, 54, has asserted growing control over prices and production in his self-declared drive to impose socialism on the nation of 28 million. Since winning re- election to a second term in 2006, he has forced foreign oil companies into joint ventures and nationalized utilities, the cement industry, a steel mill and a bank.
“This is a process of the state absorbing different distribution and production chains that they consider strategic,” said Carlos Machado Allison, an economist at the Instituto de Estudios Superiores de Administracion, a business school in Caracas. “This will only exacerbate food inflation and drive the little private investment that’s left away.”
Price Controls
Chavez, a former Army officer, has imposed price controls for staples such as rice, pasta, cooking oil and milk in a bid to control inflation (http://www.bloomberg.com/apps/quote?ticker=VNVPIYOY%3AIND) fueled by government spending on social programs for the poor. Venezuela’s inflation rate last year was 32 percent, the highest among 78 economies tracked by Bloomberg. Food prices jumped 47 percent.
The government raided a plant owned by the country’s largest rice-processing company, Empresas Polar SA, two days ago and seized 16,000 tons of raw rice, El Nacional reported. A spokesman for Polar called the seizure “illegal and arbitrary,” the newspaper said.
The Agriculture Ministry said it would temporarily occupy rice mills to assure that the companies package the highest amount of rice for sale under price controls, El Nacional said yesterday.
Phone calls by Bloomberg News to Polar’s corporate offices weren’t answered yesterday.
Mill Takeover
Richard Canan, deputy minister at the agriculture ministry, told state television today that Polar’s rice mill has been taken over by authorities who will oversee production to assure the mill operates at full capacity and packages rice subject to state price controls.
The plant was producing 3,000 tons a month, below its full capacity of 7,000 tons a month, Canan said. The government will seek to establish norms to determine what percentage of processed rice products can be sold as flavored rice, which isn’t subject to price controls.
Agriculture Minister Elias Jaua (http://search.bloomberg.com/search?q=Elias+Jaua&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said today on state television that Polar was processing 90 percent of its rice outside of price controls and charged double for the product after adding a powder with artificial coloring and flavoring.
The Venezuelan Rice Mill Association, known as Asovema, lists 11 companies as members on its Web site, including Minnesota-based Cargill Inc.
Lisa Clemens (http://search.bloomberg.com/search?q=Lisa+Clemens&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a Cargill spokeswoman in Minnetonka, Minnesota, didn’t immediately return telephone and e-mail messages seeking comment. A security guard at Cargill’s office in Caracas said there was no one available to comment.
Unaware of Order
Rafael Torres, a supervisor at the Iancarina CA processing plant in Venezuela’s Portuguesa state, said he was unaware of Chavez’s order and that the plant was operating normally.
Asovema issued a statement expressing surprise at the measure because the industry is producing at full capacity and the government has yet to establish quotas for different types of rice, according to El Universal. The government’s action won’t increase the supply of rice in supermarkets, the statement said.
Chavez issued 26 decrees last July increasing his control over food storage and distribution and allowing the state to jail company owners for hoarding. The president, who has been in office since 1999, won a referendum Feb. 15 to abolish term limits and will run for a third, six-year term in the 2012 general elections.
Companies Object
Private business groups like Cavidea, which represents about 85 private food companies, say price controls force companies to operate at a loss.
Chavez said rice processors have been buying the raw material from local farmers but refuse to sell white rice at the controlled price. Instead, they add colors and artificial flavors to evade the controls, which apply to white rice.
“They’ve refused 100 times to process the typical rice that Venezuelans eat,” Chavez said today during his “Alo Presidente” program on state television. “I’m tired of it and if they don’t take me seriously I’ll expropriate the plants and turn them into social property from private property.”
The government will take control of a second mill, known as Arroz Mary, tomorrow, Chavez said.
Venezuela, the biggest oil exporter in the Western Hemisphere, has seen export revenue plunge along with oil prices, which are down 56 percent in the past year.
Chavez has yet to pay companies including Exxon Mobil Corp., Cemex SAB, Ternium SA, and Banco Santander SA for their assets, which Caracas-based consulting firm Ecoanalitica estimates at about $11 billion.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4GDkTtVsrFY&refer=home