Venezuela’s Chavez promises to lower prices of farm supplies by expropriating company

Monday, October 4, 2010

Chavez: State will lower prices of farm supplies

CARACAS, Venezuela — Venezuelan President Hugo Chavez promised on Monday to bring down prices of seeds and fertilizer as his government takes over a leading farm-supply business.

Chavez accused Agroislena CA of speculating with prices of goods such as seeds.

“Enough already. I gave them a chance,” the president said during an event in rural Portuguesa state.

Chavez announced Sunday that the government was taking over Agroislena, which was founded in Venezuela more than five decades ago by Spanish immigrants from the Canary Islands and has grown into a market leader with branches across the country.

The company’s board of directors said in a statement that they had not received any notification beyond the president’s announcement.

“It’s very hard for us to believe that a business like Agroislena could end up being expropriated, and the only explanation that occurs to us right now is that the president … hasn’t been sufficiently well informed,” the company said in its statement, rejecting the measure and urging Chavez to reconsider. It predicted a state takeover would “produce adverse effects for national agricultural production.”

It said the Spanish-owned company has made the biggest investments of its history during the past 11 years — a period coinciding with Chavez’s presidency, which began in 1999. It also said the company currently sells supplies on credit to more than 18,000 farmers in Venezuela.

A few dozen workers protested at a company business in Portuguesa state on Monday, appearing on television holding signs saying: “No to the expropriation.”

“Let them protest,” Chavez said. “They have a right, but it’s expropriated.”

Agroislena said it was not supporting or organizing the protests, which it said were spontaneous. The company said it was operating as usual.

Chavez’s socialist-oriented government has nationalized or expropriated businesses in sectors ranging from cement to retail stores.

Chavez said Sunday that he also plans to increase seizures of farmland deemed underused in order to aid small farmers. The program has been under way for years, and Agriculture Minister Juan Carlos Loyo said on Chavez’s television program that the government plans to seize an additional 250,000 hectares (more than 600,000 acres) in the coming month.

Jose Manuel Gonzalez, a newly elected opposition lawmaker for Guarico state, said years of rising food imports show the farm seizures have been a failure.

“Everything that falls into the hands of the government is destroyed,” Gonzalez said.

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