Garbanzo Toons

The Wonders of Socialism

From the Washington Post:

CARACAS, Venezuela -- Meat cuts vanished from Venezuelan supermarkets this week, leaving only unsavory bits like chicken feet, while costly artificial sweeteners have increasingly replaced sugar, and many staples sell far above government-fixed prices.

President Hugo Chavez's administration blames the food supply problems on unscrupulous speculators, but industry officials say government price controls that strangle profits are responsible. Authorities on Wednesday raided a warehouse in Caracas and seized seven tons of sugar hoarded by vendors unwilling to market the inventory at the official price.


A supermarket worker explains to a customer that their meat section is out of beef and chicken in Caracas, Wednesday, Feb. 7, 2007. President Hugo Chavez's administration blames the scarcity of basic food products on unscrupulous speculators and government opponents, but industry officials blame government price controls which they say are strangling profits and causing distortions in the market.

A supermarket worker explains to a customer that their meat section is out of beef and chicken in Caracas, Wednesday, Feb. 7, 2007. President Hugo Chavez's administration blames the scarcity of basic food products on unscrupulous speculators and government opponents, but industry officials blame government price controls which they say are strangling profits and causing distortions in the market.

Major private supermarkets suspended sales of beef earlier this week after one chain was shut down for 48 hours for pricing meat above government-set levels, but an agreement reached with the government on Wednesday night promises to return meat to empty refrigerator shelves.

Shortages have sporadically appeared with items from milk to coffee since early 2003, when Chavez began regulating prices for 400 basic products as a way to counter inflation and protect the poor.

Yet inflation has soared to an accumulated 78 percent in the last four years in an economy awash in petrodollars, and food prices have increased particularly swiftly, creating a widening discrepancy between official prices and the true cost of getting goods to market in Venezuela.

"Shortages have increased significantly as well as violations of price controls," Central Bank director Domingo Maza Zavala told the Venezuelan broadcaster Union Radio on Thursday. "The difference between real market prices and controlled prices is very high."

Most items can still be found, but only by paying a hefty markup at grocery stores or on the black market. A glance at prices in several Caracas supermarkets this week showed milk, ground coffee, cheese and beans selling between 30 percent to 60 percent above regulated prices.

The state runs a nationwide network of subsidized food stores, but in recent months some items have become increasingly hard to find.

At a giant outdoor market held last weekend by the government to address the problems, a street vendor crushed raw sugar cane to sell juice to weary shoppers waiting in line to buy sugar.

"They say there are no shortages, but I'm not finding anything in the stores," grumbled Ana Diaz, a 70-year-old housewife who after eight hours, had managed to fill a bag with chicken, milk, vegetable oil and sugar bought at official prices. "There's a problem somewhere, and it needs to be fixed."

Gonzalo Asuaje, president of the meat processors association Afrigo, said that costs and demand have surged but in four years the government has barely raised the price of beef, which now stands at $1.82 per pound. Simply getting beef to retailers now costs $2.41 per pound without including any markup, he said.

"They want to sell it at the same price the cattle breeder gets for his cow," he said. "It's impossible."

After a meeting with government officials Wednesday, supermarkets association head Luis Rodriguez told the TV channel Globovision that beef and chicken will be available at regulated prices within two to three days. He did not say whether the government would be subsidizing sales or if negotiations on price controls would continue.

The government has urged Venezuelans to refrain from panic buying and is looking to imports to help.

Jorge Alvarado, trade secretary at the Bolivian Embassy in Caracas, told the state news agency that Venezuela's government plans to import 330 tons of Bolivian beef next week, eventually bringing that to 11,000 tons a year. It also plans to import 8,250 tons of beans, chicken, soybeans and cooking oil, Alvarado said.

Government officials dismiss any problems with price controls, while state TV has begun running tickers urging the public to "denounce the hoarders and speculators" through a toll-free phone number.

"The weight of the law will be felt, and we demand punishment," Information Minister Willian Lara said Wednesday.

Ain't Socialism grand, bringing so much happiness to so many people?

Of course, the fault isn't with Socialism, it's the fault of those hoarders and speculators who refuse to behave the way that Marx predicted socialists should behave.

Labels: Socialism, Venezuela

posted by Harry @ 4:56 PM