Hugo Chavez on milk, banks and bullets

Jonn Lilyea | January 21, 2008

Blaming milk producers for the shortage of milk in Venezuela, Hugo Chavez threatened to seize dairy farms (Bloomberg link);

“If a producer refuses to sell to a plant here, and prefers to sell it as contraband to Colombia, well then, interior minister, bring me the proof and we’ll expropriate them,” Chavez said.

So of course we knew that somehow Columbia is to blame since they’re Chavez new bogeyman in South American politics. I guess farmers aren’t trying to get a better price for their milk since Chavez had fixed prices in 2003 while farming costs have risen along with the national inflation rate (26% in 2007). So in effect, the Chavez administration has encouraged a black market for milk – and now he’s threatening to nationalize another industry.

Chavez’ government has already bought the country’s only milk processing plant from Parmalat (which is operating at 6% capacity, by Chavez’ own admission), so the Venezuelan government is the only customer in the country with fixed, government-mandated prices. Dairy farmers are dependent on loans to keep their farms afloat, but if the farmers are losing money, what bank will give them loans to perpetuate their indebtedness – and Chavez is threatening to seize banks, too.

GI Jane sends along this link from CNN that Hugo also threatened to nationalize banks in Venezuela, too, during the same Alo, Presidente cadena yesterday;

President Hugo Chavez threatened Saturday to take control of banks that fail to meet state-imposed lending requirements designed to benefit Venezuela’s farmers.

Chavez, who says he is leading Venezuela toward “21st century socialism,” accused many private banks of neglecting laws requiring them to set aside nearly a third of all loans for agriculture, mortgages and small businesses at favorable rates.

“The law must be applied,” said Chavez during a televised meeting with farmers. Any bank that doesn’t comply with these lending requirements “should be seized.”

So he’s blaming milk shortages on the only entities in the milk trade that he doesn’t yet control.

While he forbids the export of milk to Columbia, he apparently has no problem with shipping ammunition to Columbia’s narco-terrorists FARC (Miami Herald link)

Venezuelan-made ammunition is regularly reaching Colombia’s FARC and ELN guerrillas, Colombian military intelligence officers have told El Nuevo Herald.

One of the officers said the evidence available did not indicate whether the ammunition reaching the rebels is “a consequence of the growing corruption that exists in the Venezuelan military and police forces, or the result of a policy by President Hugo ChÃ¡vez.”

The officers said their evidence came from inspections of ammunition seized from guerrillas in northeastern Colombia, on the border with Venezuela, and the testimony of deserters from the Revolutionary Armed Forces of Colombia, or FARC, and National Liberation Army, or ELN.