Friday, November 02, 2012

The oncoming food crisis in Venezuela

Two hair raising articles in El Universal this week.

In English first. We learn that in one year, according to the numbers of the Venezuelan Central Bank food production in Venezuela went down by at least 6%.  And the minister who presided over the direct causes of that recent drop, Loyo, has just returned to the cabinet 2 weeks ago.  So there you go for your forecast of food production for the next year.  Why Loyo returned is a mystery since he was rumored that he had been fired for corruption, gross incompetence, outright larceny and what not. But he is one of the henchman of Jaua and when he went to run for Miranda he could not leave the cabinet without reliable eyes in it.

If you can read Spanish there is a report on how coffee production keeps dropping and how under Chavez Venezuela went from a coffee exporter to a major importer. It details a lot of the ills that strike the Venezuelan country side, not only losing production but losing quality. It reads like a horror story of incompetence and corruption and deadbeatness.

It is to be noted that Venezuela used to have the best coffee in the world in the late XIX and early XX. It still has the best but for that you need to know a small producer and buy directly from that finca. Because the regime mixes all, good and bad beans, from Nicaragua or from elsewhere, to create what has become a warm beverage with caffeine inside. When you can find it.

I have written about coffee in Venezuela in the past, so all of this is of no surprise to the regular reader (2010, 2012, 2009, 2006 and more). What is a surprise is that if in spite now 6 years of continuous negative results the regime is unable to come to grips with its failed coffee policy.  And yet, a populist government like Chavez's one could do something simple which will allow for a fast increase in coffee production (still possible, the trees have not been all destroyed yet). The solution is simple: let the growers sell at whatever prices they can get and buy, forced if necessary, 30% of the harvest or the torrefactor production, to make a subsidized coffee to be sold exclusively through state stores at whatever prices it wants. Ration cards accepted there if needed. This by itself would ensure that the 30% sold at Mercal would act as a brake to heavy price increases elsewhere and would make private companies make generic coffee to be able to compete in certain areas of the country against Mercal. The 25% that can afford it will pay premium coffee prices and this way subsidize indirectly the generic brands for massive consumption. That way at least 50% of the coffee would be sold at a politically acceptable price.

Or some scheme like that, which even if economically unsound is better that the relentless price controls which twin results area crash in coffee production and quality.  But then again such coffee policies are brought to you by the brilliant minds that have not increased the gasoline prices since Chavez came to office in February 1999.

Think a little bit: if this is the story of coffee, do I need to write about the stories of chicken, corn, tomatoes, etc....

¡Viva Chávez! ¡Carajo!


  1. Pero que viva en Cuba!

  2. Enjoy the Hunger Games!

  3. ...and not time to open a coffee franchise. Mind you, Estrellabolos never did have a good ring to it!

  4. And yet, good coffee is there. On the international way out at Maiquetia one can find excellent coffee at the duty free shop. Three hours away from the nearest Starbucks or even better quality if one flies to Europe. Go figure! It is not there it is needed but at the local CM.

    However, closer to home, at the national airport in Maiquetia, on the way to ramp 5, there is a little shop among the fast food outlets, that sells choice products such as casabe, honey etc. They have a coffee called El Monasterio, premium price, premium quality also. I am having a cup right now. Hummm!


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