Venezuela puts state-owned food companies in private hands as socialist policies are withdrawn

CARACAS, Sept. 13 (Reuters) – The Venezuelan government allows private companies to run at least 13 nationalized food companies a decade ago, according to a dozen people familiar with the situation, in an effort to improve operations under management state.

The government of President Nicolas Maduro has retained ownership of troubled companies that produce food ranging from cornmeal and dairy products to canned tuna and seeds, but has authorized operations to third parties in exchange for payment, according to sources and documents seen by Reuters.

It is another example of how Maduro has recovered key elements of the state-led economic model from his predecessor Hugo Chávez, as part of the economic liberalization that began in 2019 in response to U.S. sanctions and a collapse. economic.

But it seems unlikely that the change will dramatically change agricultural productivity after a decade of low investment and an economy in the throes of years of hyperinflation, according to economists.

“With the economic crisis, the management model is changing to increase revenue or reduce state spending,” said economist Richard Obuchi, director of local consulting firm ODH.

“Government control has been losing its meaning.”

Private operators have to bear the costs of payroll and finance investments and allocate part of their production to state food distribution programs, according to sources.

One of the companies that are now under private administration is the maize manufacturer Industria Venezolana Maicera Pronutricos, nationalized 11 years ago.

This year, its operations were leased for five years to a company called Alimentos El Maizal for the equivalent of about $ 16,000 a month, according to a copy of the deal seen by Reuters.

These agreements are covered by an “anti-lockout law” aimed at renewing the economy in response to sanctions. The law was passed in 2020 by a parallel pro-government legislature called the National Constituent Assembly, which was dissolved in December.

State officials describe the arrangements as the lease of industrial facilities or, at times, as “strategic alliances.”

“Strategic alliances are created for private companies to be the ones run by state-owned companies,” Rafael Calles, governor of the Portuguese state of agriculture, said in an interview. “None of these alliances involve stock sales. The company remains in state hands.”

He said Portuguesa receives about $ 60,000 a month from companies operating nationalized companies, adding funds paid for the purchase of water pumps and electric transformers.

The Ministry of Information, the Ministry of Agriculture, Pronutricos and Alimentos El Maizal did not respond to requests for comment.

OUTSOURCED FAILURE

Chávez in 2007 launched a wave of nationalizations that put hundreds of companies under state control in sectors described as “strategic,” ranging from oil industry operations to agricultural companies and oil processing companies. food.

These companies suffered rampant corruption, as well as price controls that minimized revenue, often leaving them dependent on government funding.

The outsourcing plan has not always worked.

Agropatria, which sells seeds and agricultural inputs, has put offices in two states under private management, according to two sources, who said the company is still struggling to deliver the products farmers need.

Agropatria did not respond to any requests for comment.

Four sugar mills located in the agricultural center, which are part of a group of ten nationalized in the Chávez era, remain inactive despite having contracted operations with private companies.

One of them is the Pio Tamayo mill, which has been managed by a company called Consorcio Veinca since the first quarter of 2021.

Its workers complain about the stopped operations and the late payment of wages.

“They were going to invest in facilities and raw materials, which has not happened,” employee Noel Quetel said in an interview.

The Veinca Consortium did not respond to requests for comment.

Report by Mayela Armas in Caracas Additional report by Keren Torres in Barquisimeto Writing by Brian Ellsworth Writing by Matthew Lewis

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