July 13, 2016 | By

Don't Forget Agriculture: Lessons from Venezuela

An empty refrigerator is seen inside a supermarket in Caracas, Venezuela, June 10, 2016. REUTERS/Ivan Alvarado

In the past several weeks, hundreds of urban Venezuelans have taken to the streets over a combination of food shortages and skyrocketing (we’re talking 500 percent) inflation that have precipitated a mounting hunger crisis. Dozens of riots, protests, and mass lootings have destroyed businesses and resulted in at least four deaths, as citizens have ravaged often-empty supermarkets, desperate for food.

As of now, the overwhelming majority—nearly 90 percent—of Venezuelan families do not have enough money to buy sufficient food. Food prices have risen such that only the most basic staples are in reach, as the most nutritious items—meats and dairy products—are far too expensive. This inaccessibility has had far-reaching effects, from brimming malnutrition, to financial decay, to poor school attendance, as both students and teachers are forced to take time away from school to wait in lengthy food distribution lines.  

This tension throughout the country, it turns out, has been bubbling under the surface for months; as early as November 2015, food shortages were polled as the number one worry of Venezuelan citizens. This concern has now manifested in the form of widespread unrest.

Food price spikes cause instability  
 

A recent report by the Chicago Council on Global Affairs points to the causal relationship between food price spikes and violence. Cullen Hendrix, author of When Hunger Strikes: How Food Security Abroad Matters for National Security at Home¸ asserts that food price riots are very likely to occur in the urban areas of low- and middle-income countries, where food-related expenditures account for more than 50 percent of household income. Here, Venezuela fits the profile, at nearly 90 percent urban and where households spend more than 70 percent of their monthly wages on food purchases.

Where the Venezuela case differs from Hendrix’s analysis, however, is in his observation that food price riots are typically carried out by members of the middle class—those who are not chronically food insecure, but who have more clout in confronting political authorities over declines in purchasing power. However, it seems that the middle and lower classes alike are rioting throughout Venezuela—a factor that perhaps indicates the severity of their deprivation.

What went wrong?
 

At one point, Venezuela maintained a long tradition of robust agricultural production; its abundant farmland and temperate climate allowed the growth of a variety of grains, fruits, vegetables, and meat and dairy products. Theoretically, this is a country that could be producing more than enough to supply its population, or even regional markets, with food.

But, a century ago, Venezuela struck oil—the largest oil reserve in the world—and thus began the decline of its agricultural sector. By instituting a slew of policies that resulted in the confiscation and reallocation of once productive land to societal elites, as well as price controls that slashed profits for domestic farmers, the government drained and disincentivized agricultural production in favor of a booming oil industry. Today, agriculture contributes less than 4 percent of Venezuelan GDP.

To compensate, the government has relied on food imports, purchased with oil revenues, to feed the population. Meanwhile, Venezuela began accepting billions of dollars worth of loans (mostly for the development of the energy sector, no less) from China, in exchange for 700 million barrels of oil a day.

It was all working out—that is, until oil prices dropped and revenues along with them. Venezuela’s debt grew and its currency weakened, restricting cash available for cross-border purchases. Last November, Venezuela paid out just a fifth of the money promised to Uruguay in exchange for more than 200,000 tons of food, and the delivered tonnage suffered commensurately. This pattern has continued, creating food shortages and driving up the prices of any available food.  

A call too late  
 

In the midst of this crisis, the President is now calling for citizens to begin growing their own food and raising livestock. He established the Venezuelan Ministry of Urban Farming to spearhead this effort, engaged the military to root out mismanagement at ports, and has also begun to promote sales from food producers in rural Venezuela to urban consumers. Some have answered the call—former farmers, who’ve set up small rooftop gardens to grow squash, beans, and bananas. But the amount of training and technology that urban residents would require to feed Venezuela’s 30 million people, or the investment required to connect rural production with urban markets, is massive. It will be years before domestic, Venezuelan agriculture is able to adequately sustain the country. 

As we enter an increasingly urban age, policy may tend to divert resources away from agriculture and rural development to cope with the complications associated with governing growing cities. But, as Venezuela’s plight so sadly reminds us, a robust agricultural sector is an essential component of a healthy, safe, and prosperous society—and concerted, continuous investment is key. In stunting agricultural development, Venezuela has foregone extraordinary gains in the fight against hunger. And those gains will be a long time in returning.

About

The Global Food and Agriculture Program aims to inform the development of US policy on global agricultural development and food security by raising awareness and providing resources, information, and policy analysis to the US Administration, Congress, and interested experts and organizations.

The Global Food and Agriculture Program is housed within the Chicago Council on Global Affairs, an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. The Council on Global Affairs convenes leading global voices and conducts independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

Support for the Global Food and Agriculture Program is generously provided by the Bill & Melinda Gates Foundation.

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