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In Venezuela, the Newest State Business Is a Dairy
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José Mendez Duarte, a cattleman in the western state of Tachira, said milk and meat producers have watched with dread as squatters, spurred by government land policies, have seized farms. "Who wants to produce when you're threatened," he said. "You either maintain production at the level it has been, or it goes down. There is no motivation to produce."
Mendez said the government-set price on milk, although it was recently raised from about $2.80 a gallon to about $3.30, offers little incentive when production can cost even more.
"It is bad business to produce," he said. "The state wants to run everything. They want to have the farms. They want to run the companies."
Still, not all the news is dour, said José Campos, president of the National Confederation of Growers and Cattlemen of Venezuela. He said the shortages are generated by a sharp increase in demand among the poor, who have benefited under a government that spends freely on subsidies and social programs.
He also said interest rates are far lower now than they were in past governments. That is helping create the kind of foundation Venezuela needs for production to increase.
"The positive message in this whole situation is that we have the legal framework for Venezuelan cattle production to take off," said Campos, who produces milk on his farm in the state of Maturin.
In recent weeks, shortages have eased as the government lifted price controls on some products. Regulators raised the price paid to producers on others. It also created an agency, closely allied with the state oil company, to distribute food.
Figueroa, of the dairy association, said that Chávez has shown a willingness to meet with producers to find ways to increase production. "If we don't resolve this domestic production problem, in a few years we are going to have a much more critical situation," he said.
Milk production has, to be sure, increased at Los Andes, from about 5,300 gallons a day in March to upwards of 45,000 gallons a day in May as the company retooled, said Herrera, the president.
"We have a good plan," he said. "I am not talking to you about dreams and utopias. I am sure we are going to break all the production records this company had in its history."
