The Venezuelan government has ordered the expropriation of a rice processing plant owned by Cargill, after inspections that revealed the multinational food giant had been maliciously evading price controls.
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The Chávez government first introduced price controls five years ago as part of an effort to make food affordable to the poorest sectors of the Venezuelan population. Price regulations were supplemented by the creation of a government-controlled network of production and distribution facilities.
Many private food producers immediately responded to the regulations by withholding foodstuffs and creating artificial shortages in grocery stores. In the battle for control of one of the most basic necessities of life, food producers have turned even rice plants into instruments of class warfare.
Because price controls do not apply to modified foods such as parboiled and flavored rice, Cargill shifted production away from unmodified rice to evade regulations. Whether or not working-class Venezuelans would have access to this staple food at affordable prices did not figure into the company’s calculations.
The company’s 160,000-strong workforce operates in 67 countries. Responsible for 25 percent of all U.S. grain exports, Cargill raked in $3.95 billion in 2008 in net earnings from its worldwide sales. Its product line in Venezuela includes edible oils, pasta, flour, rice, cookies, fruit juice, pet foods, and livestock and poultry feeds.
The government placed another rice plant owned by Polar, Venezuela’s largest food producer, under administration Feb. 28. The National Institute in Defense of People’s Access to Goods and Services (INDEPABIS) had discovered that the plant was operating at half of its capacity, with flavored rice accounting for 90 percent of production.
Chávez warned that, should rice producers retaliate by shutting down their facilities, all of their plants would be converted into social property.
Who should control the economy?
The confrontation between the Chávez government and food producers is part and parcel of the class war unfolding in Venezuela. The Bolivarian revolution has brought to the fore the contradictions between Venezuela’s toiling masses and the foreign and domestic corporate interests that, until only a few years ago, enjoyed unchallenged control over the country’s economic resources. Though the Chávez government has put the country on the path to socialist production based on human needs, the road has been riddled with obstacles created by U.S. and Venezuelan capitalist interests.
Nationalizations have been essential for the advance of the Bolivarian revolution. In April 2008, the Chávez government acquired a controlling stake in the country’s main cement producers and nationalized Ternium Sidor’s operations in Venezuela. Cement companies had favored the more profitable export market at the expense of domestic needs such as housing development. The expropriation of Ternium Sidor, for its part, put an end to the steelmaker’s intransigent position and aggressive tactics in the course of a 14-month-long contract negotiation with its workers.
Other nationalizations included CA Nacional Teléfonos de Venezuela, the country’s main telecommunications company, and Banco de Venezuela, formerly owned by Grupo de Santander.
The nationalization of oil production has been the most important by far. The Chávez government announced in 2007 that multinational oil giants operating in the rich Orinoco Belt region would have to give up their majority stakes to the government-controlled Petróleos de Venezuela S.A. Nationalized oil has supplied funds for public housing, education and health care, and has been extended at preferential prices to countries in need of energy resources.
At the heart of the struggle for socialism is the fight for control of the means of production. In a revolutionary context, the question of nationalization is, who should control the economy: the workers or the capitalists?
Nationalization may initially benefit the masses in a country oppressed by imperialism, that is fighting for its national economic development.
Mexico’s historic takeover of its oil, on March 18, 1938, from U.S. and British oil corporations, enabled Mexico to invest in education, infrastructure and urban development and accelerated land reform and agricultural support for the peasant population.
Nationalization under capitalism will be fiercely opposed and sabotaged by the capitalists, will inevitably leading to re-privatization.
With Mexico confined to the capitalist orbit for over 70 years, hundreds of its strategic nationalized industries—railroads, mining, airlines, telecommunications, trucking—have all been re-privatized to pay back billions of dollars in foreign debt. Now the right-wing government of Felipe Calderón is plotting to return Mexico’s oil back to private investors. The people have been waging a fierce fight against that.
Venezuela’s revolutionary government has set its goal as fighting for socialism. The recent nationalizations are an important step. With each expropriation by the Chávez government, the Bolivarian revolution is weakening the grip of the capitalist class over the economy’s productive resources and using this reclaimed social wealth to meet the needs of the masses.
The Cuban experience
Cuba, Venezuela’s closest ally, carried out the most complete land reform in the western hemisphere.
On the eve of the 1959 revolution, 75 percent of the land was in the hands of 8 percent of the population. A handful of wealthy families owned large estates while most rural families lived in extreme poverty. U.S. companies owned 56.3 percent of sugar cane production—the country’s main crop.
One of the earliest revolutionary acts following the ouster of Cuban dictator Fulgencio Batista was the Agrarian Reform Law of 1959. Affecting foreign and domestic landholders alike, the legislation limited landholdings to 993 acres, expropriated large-scale plots that were redistributed to poor farmers and peasants, and nationalized cattle ranches. The second Agrarian Reform Law, passed in 1963, nationalized all landholdings over 165 acres and organized farmers into a national association.
Under the leadership of Fidel Castro, access to food became a right. Rationing of food resources was introduced to ensure that no one went without.
When the Soviet Union was overthrown in 1991, Cuba was deprived overnight of its largest trade partner. The availability of food decreased sharply. However, centralized economic planning made possible tighter rationing of food resources, the implementation of reforms meant to boost agricultural output, and the introduction of large-scale urban and organic farming.
There was hardship, but Cuba weathered the storm. None of this could have happened in an economy fueled solely by the profit motive.
The lessons of the Venezuelan, Mexican and Cuban experiences are clear. Capitalist production is incapable of providing for many even the most fundamental necessities of life. For-profit ventures such as Cargill have shown that there is no progressive measure that they will not try to circumvent or undermine to secure the greatest profits. Only the elimination of private control over the economy can permanently guarantee that the needs of people are met.
