Food rationing to begin in big Venezuelan state

[Bacchus4.0]

http://news.yahoo.com/food-rationing-begin-big-venezuelan-state-215524026.html

CARACAS, Venezuela (AP) — In a sign Venezuela's food shortages could be worsening, restrictions on the sale of 20 basic items subject to price controls, including toilet paper and chicken, are set to begin next week in its most populous state, officials said Tuesday.

A spokesman for President Nicolas Maduro's government said it is incorrect to call the plan rationing because it is meant to fight smuggling of price-controlled food across the border into Colombia. He said there are no plans to extend the program nationally.

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But Zulia will issue computer chip cards beginning next week that will limit consumer purchases of products including rice, flour, cooking oil, sugar and powdered milk, he said. The quantities each family will be allowed to buy, on a daily or weekly basis, have not yet been determined, he said.

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For one, price controls for more than 100 items imposed more than a decade ago under the late President Hugo Chavez are regularly ignored in all but state-run markets. Merchants say adhering to them would be suicidal for their businesses given inflation that reached a 29.4 percent annual rate in April.

[RobertEarl]

1. Good news

Fighting the capitalist smugglers who take from the poor is always good to hear.

Even in America, land of the all-important capitalists, the government has price support on some foods. Luckily we also keep the producers from poisoning us. One the one hand we help them keep prices high, and on the other we hurt them by not allowing them to make even more money by feeding us poison.

[naaman fletcher]

2. Price support and price limites are two different things

Amazing you think that 1950's eastern european rationing is a good thing.

(PS, I am against price supports, too. was just pointing out that they are totally different from price limits).

[RobertEarl]

4. But of course differences

US keeps prices higher and Venezuela is keeping prices lower.

That's because we are capitalist.

Except for when we are being socialist with highways, military, and space programs. If only Venezuela was rich like us, they'd have price supports too!

[naaman fletcher]

5. Ok,

So, do you really see 1950's eastern european shortages and rationing as a good model for the world?

[RobertEarl]

6. Not what I said at all

I think Venezuela is recovering from oppression and its government is trying to keep the smugglers from hoarding.

All I am doing is making a comparison between the US and Venezuela in its economic systems. We are rich. We can't expect poor countries to be like us. They have very different circumstances. Right?

[naaman fletcher]

7. Sure they have different circumstances

But, do you have any examples of where rationing has led to a positive outcome?

[RobertEarl]

8. When we have disasters Rationing happens.

We also have price controls around disasters. Venezuela has been a disaster, right?

What they are doing is blocking smugglers, it's right there in the OP.

Here we put smugglers in jail. There they are fighting them using economics.

[naaman fletcher]

9. Thats absurd

There is a huge difference between a few days from an unexpected disaster, and the entire workings of an economy.

So again, please give me an example of where permanent price controls have had a positive outcome.

[RobertEarl]

10. Who said permanent? Just you.

Venezuela will probably drop the rationing when the smugglers are gone. Besides, like it says in the OP, it is in just one area.

Why do you hate Venezuela doing what it deems best for poor people?

[naaman fletcher]

11. OK,

So, how long do you think the rationing will last?

I don't have venezuela doing what it deems best for poor people. VZLA has done some great things for poor people. However, the price and currency controls don't help poor people, in my opinion.

[RobertEarl]

12. It will last until stability is reached

We had the OPEC gas crisis here. It ended.

[naaman fletcher]

13. We will have to agree to disagree

I don't think that price controls will lead to stability, I think they will lead to unstability, but I respect that you want the best for the Venezeulan people even if we disagree on how to get there.

cheers.

[Socialistlemur]

18. The current regime has been in power for 13 years

I don't see much recovering from oppression in Venezuela. That's a worn out excuse. The problem they face is the price controls, which keep basic food prices way below real market price. You may think this is fine but at the black market rate salaries are also very low...the basic salary expressed in USD is about $80 US per month. And many don't even make it because they work in the informal job sector. So this is pure math, the prices are lower in Venezuela, the black market is at 30 bolivars per dollar, official is 6.3, the border is porous...and people are poor and going hungry. I read even the National Guard based near the border are smuggling and driving price controlled food towards Colombia, including live cattle. These "capitalists" you complain about, who refuse to become new socialist man, are everywhere. They are Everyman, most of them are poor and this Madurista mumbo jumbo isn't about to stop them. What Venezuela needs is a 100 % devaluation in the official rate and food stamps. The basic food should be given away using either a paper currency used to buy this food only, or if you want to a debit card. But to have a debit card work they'll need a more robust technology because power supply is unreliable. It sure gets complicated but it can be solved....only if they do devalue.

[RobertEarl]

20. That's crazy

$80 a month? That's poverty level.

And you think the government should give food away while devaluing the $80 a month wage? How low do you think it should go? $40 a month? Will that make you happy?

If you give food away, the farmers will go broke. Is that what you want, the farmers to go broke?

Your economic theories are junk. Your theories would destroy the working person. But then, that is the former V govt. worked to do.

[Bacchus4.0]

3. good news unless you need to go shopping n/t

s

[Marksman_91]

14. Just one question

Why is this rationing happening in Venezuela with the highest oil prices in its history and after 14 years of Chavez's rule? Are you saying then that after all this time, 14 years is not enough to have solved the food crisis and taken care of the hoarders (who I highly doubt are the most responsible for this whole situation)? Why is this not occurring in other LatAm countries which don't happen to have oil?

[RobertEarl]

15. Good questions

My answers are not to be taken as gospel. With that clear....

V was one of the most oppressed LA countries. It wasn't until about half way through Chavez's tenure that most oil revenues began staying in the country. Until then the oil was owned by Big oil who did not pay a fair price.

V was until then, one with a very high population of the poorest, most poverty stricken, uneducated people of LA.

Most of the land was in very few hands of large land owners.

So, it took 7 years to get things on the road to prosperity for the poor. And the last 7 things have been looking better and better. Now that people have disposable income, what we here consider as basics are just getting to the masses. That causes some shortages as distribution lines are stretched.

As I understand it, rich people are against the progress as it means they have to share a limited economy. So they have been fighting progress the whole way. The rich can easily hoard things and that causes ripples through a growing economy. Hoarding can be a get rich scheme, and this is why this one border state has to have some regulation, because it is ripe area for getting rich quick.

Given that Cuba and V are close allies, and that Cuba has been economically embargoed by the US, V has likewise been mistreated by the US. That means we've kept a mean monetary policy toward V, unlike our policies to other LA countries.

Does that help to understand the problem?

[Marksman_91]

16. Not really...

I am actually Venezuelan, and just came back not too recently from Caracas. I travel back and forth very often between there and where I am right now (Miami, FL). I tell ya, things are NOT looking up for anybody there.

All you did was repeat the same propagandist nonsense that the Maduristas shout out. Our currency is only getting weaker and weaker the longer Maduro and the rest of the Chavista lot stay in power. High inflation (the highest in the region) has made every single product more expensive (I remember when I was able to buy a hot dog on the street for around 7 BsF. Now it's around 13 BsF. for the same hot dog). And not to mention the reoccurring blackouts that happen throughout the whole country due to a lack of improvement/expansion of national energy production.

I would really love it if you could actually show me raw NUMBERS that prove whatever it is you're saying regarding the rich hoarders being the sole responsible ones for the food shortages. Right now we're having to import almost all our products, mostly due to the fact that the government has seized throughout the years a lot of property from the private sector (without any kind of compensation, by the way), and pretty much all of it has been left uncared for, dramatically reducing production, and the only thing that seems to keep the country afloat are oil exports. And please let them be from an unbiased source. Don't show me anything by Aporrea or VenezuelaAnalysis, or that god-awful hypocrite Eva Golinger, because they are clearly ideologically biased.

While I admit that this regime has helped to drastically reduce poverty (I'd say that's their greatest achievement, even), the policies they've maintained are only gonna jeopardize the economy in the long run, and we're finally starting to see those signs these last few months. You seem to think that the Cuban political-economic model is somehow the best one to follow for any nation, and you seem to think also that the US embargo is what's keeping it from prospering. Lemme tell ya, Cuba is actually better off now only because the Venezuelan Government is now pretty much being controlled by the Castros, and they know that if Maduro or anybody else from the PSUV is not in power, Cuba will once again become the hell-hole that it used to be.

[Bacchus4.0]

17. no, thats not it.

Venezuela has been at least a mid-level income country for decades in terms of income, education, and relative poverty. Compare to that to where Peru, Brazil, Colombia, Ecuador were and Venezuela was ahead on those indices. The Caracas subway system, cable cars, and other infrastructure were largely built during the 70s during a previous oil boom now. Ven has never diversified the economy after all this time.

Brazil and Peru have experienced large economic gains recently and shortages haven't been a part of their growth.

Gas subsidies in Venezuela have been policy for decades resulting in gas being less than bottled waterand smuggling to Colombia, for example, isn't anything new.

Its clear you don't know what you are talking about.

[Socialistlemur]

19. Most of this answer is incorrect

A lot of this story is wrong. Oil prices increased gradually during Chavez' tenure. The idea that oil companies were keeping all the money is plain wrong. All we have to do is check the PDVSA accounts which used to be available to see the figures. There's also a misconception, the oil companies were in Venezuela under a variety of contracts. And many remained. The contract structure was changed, but the companies saw their terms extended and they are there because they expect to make money and not because they love charity. Or do you think Chevron is negotiating a $2 billion loan to Petroboscan, in which it owns 40 % of the stock, because its run by socialist lovers? About half the Venezuelan people voted for Capriles in the April elections. As you understand it, you sure got everything wrong. The government got itself in a mess trying to pump up the economy using debt to plug the holes. They are still desperately borrowing money, a lot of it from oil companies and this means they are mortgaging their oil. I repeat, do you think those who lend really give a crap about Chavez, his revolution, Fidel Castro or Marx? They are there to make profits, and fat ones. And what is Maduro doing? Going along because he's too dumb to understand he has to break away from Chavez' policies, which aren't sustainable.

[RobertEarl]

21. Oil companies

They are, as you say: "They are there to make profits, and fat ones"

Yep. We see that in the US as well. Oil company profits are fat.

And what does that hurt? The poor working man. But the price of gas is low in V! Who does that help? The working man.

So you have oil companies hurting the working man and Chavistas keeping prices low for the working man.

I think it is clear who is for the people and who is for the oil companies.

[Socialistlemur]

27. Flawed reasoning, my friend

Oil companies work in Venezuela as shareholders of joint venture corporations. Under Chavez the hydrocarbons laws were changed. Oil had been nationalized in 1976, but later the government had allowed private oil companies to invest via service contracts, and what they called heavy oil strategic associations (we used to joke the Venezuelans called them strategic because they weren't supposed to make money for anybody).

Around 2004 to 2006, the Chavez government started a gradual process to change the legal structure and put all the oil companies as shareholders in the new PDVSA subsidiaries they created. An example would be the one Chevron has in Zulia called Petroboscan, owned 60 % by PDVSA and 40 % by Chevron. This JV is the owner of the Boscan field...except the oil in the ground is owned by Venezuela. Interestingly Chevron books 40 % gross interest of the field oil as if it was Chevron's with the SEC. All the other multinationals do the same. I think Chevron is the biggest, but Total, Rosneft, CNOOC and Statoil are in. Rosneft is a hybrid, it's owned in part by BP, but they have a deal to operate in Venezuela with Rosneft in charge. BP in turn for Rosneft to allow a governance clause which allows it to book the oil as BPs. So we see BP claiming to own Venezuela oil via Petromonagas, the JV, and then up via Rosneft. In other words, the multinationals are still there.

The marketing of gasoline is done by PDVSA. The gasoline price is nearly free. This is incredibly stupid because it rewards those with the hummers and the huge SUVs. It's a dumb measure and it helps the wrong people. I have been telling venezuelans the gasoline subsidy is a hospital burning measure. All that gasoline sold for free could be sold for a good price, used to build hospitals, schools, and other badly needed investments. Instead, it goes out the tailpipe.

[naaman fletcher]

22. How has Vzla

Been treated "likewise" by the US?
The US has an embargo on Cuba. We buy most of VZLA's oil.

Please explain how our treatment of vzla is in even the tiniest way we treat Cuba.

[RobertEarl]

23. Hey, you're the expert

You tell me what favors the US is doing for V in the capital markets. We know the US has screwed over Cuba. And that Cuba and V are allies.

So what is Obama doing to help Venezuela?

[naaman fletcher]

24. Lol

So in other words you can't answer my question because your statement was BS

[RobertEarl]

25. You got nothing?

Can you show any time that the US has treated V with any respect?

As a bonus, throw in what we have done with Cuba.

You are all over this board professing to know what is going on, so here's your chance to be a star! Don't blow it.

[naaman fletcher]

26. umm..

I asked you a question.

You refused to answer, and deflected with a question to me.

Why should I answer your question if you won't answer mine?

Let's face it: It's obvious your statement was absurd on it's face.

[Socialistlemur]

28. The USA doesn't help Venezuela

But what's the point? Venezuela's government has made it very clear it's a USA enemy. They are allies of the Iranians, Russians, Chinese, you name it. Why should the USA help Venezuela? President Obama is very smart. He's doing absolutely nothing thus far. This helps avoid having Venezuela claim its economy is a mess due to USA actions. It keeps Obama clear and it sure looks like Maduro is doing the job with his bad moves. If he keeps going there won't be much of Venezuela's economy left. He has to change course.

[RobertEarl]

29. US does not help

And if they are not helping, they are fighting Venezuela. Thanks, you make my point for me when I say that a large percentage of V's economic problems are caused by certain powers in the US.

When that is being denied by the anti-Comrade-Chavistas-Maduros, it tells us a lot about where their arguments rise from.

When we look north and south of Venezuela, into some of the other LA countries, we see death and destruction from the hands of American corporations and US government policies. It is no wonder Venezuela is looks at the US as an enemy.

[Marksman_91]

30. The US is the one country keeping Venezuela afloat

They are the ones who buy most of our oil. They are the ones financing the "revolution".

[naaman fletcher]

31. Well Robert Earl,

It seems that Maduro disagrees with you, and called the food rationing plan "insane".

[Judi Lynn]

32. "It seems" you should get a hobby, rather than haunting this board,

attempting to attack progressives who rightfully post here.

Any ort, any snippet, any shred of "news" which surfaces you take to attempt to use against a respected, and welcome DU'er.

It doesn't "seem that Maduro disagrees with" Robert Earl. It DOES "seem" you've come to the wrong message board to practice your "insane" attempt at disruption among progressive, decent people.

[naaman fletcher]

33. If there is one thing Judi Lynn hates

It's when you or your friends are reminded that you were incorrect.

Nothing gets a rise out of you more than that.