Venezuela: Food multinational Cargill nationalised

Venezuela: Food multinational Cargill nationalised

On Wednesday, March 4, in a meeting of the Cabinet, broadcast live by state media, president Chavez announced the nationalisation of US-based multinational Cargill, a company in the food sector which has systematically refused to produce rice for the regulated price market. He also warned Empresas Polar that their food processing companies would also be expropriated unless they respected the decrees which regulate the food industry and at the same time he instructed the Minister of Agriculture to get the expropriation decrees ready for the rest of the rice producing companies.

Cargill was refusing to produce rice for the regulated price market. Chavez therefore announced on Wednesday the nationalisation of the company. Photo by Fir0002 on Wikipedia.
Cargill was refusing to produce rice for the regulated price market. Chavez therefore announced on Wednesday the nationalisation of the company. Photo by Fir0002 on Wikipedia.

This nationalisation follows the decision to put rice silos and processing plants under state intervention which was announced on Friday, February 27, during a special session of the National Assembly, which took place in the Caracas working class neighbourhood of El Valle, to commemorate 20 years of the Caracazo uprising. There, president Chavez stressed that "we will not allow these sectors to continue fooling the people. This government is here to protect the people, not to protect the bourgeoisie, nor the rich of this country." He pointed out that "the revolutionary government buys rice from the producers, but these refuse to produced regulated price rice", and warned that if the companies continued to sabotage the production of regulated rice, the whole sector would be expropriated.

One of the first companies to be put under intervention was Primor (part of the Polar group), in Calabozo, Guárico. The Vice-Minister of Agricultural Economy, Richard Canán, pointed out that this rice plant was working at less than 50% of its capacity. He explained that, "it has a capacity to process more than 7,500 tonnes a month and has been producing less than 3,000 tonnes. Furthermore, it is producing artificially flavoured rice rather than regulated rice".

On Sunday, March 1, in the weekly Aló Presidente TV programme, there was a live connection with Minister of Agriculture Jaua, who was at the Primor plant in Calabozo. Jaua explained, "The reason for this action is that the companies had created a mechanism of producing artificially flavoured rice in order to divert the raw material towards non-regulated products." On this, Vice-Minister Canán commented that, "artificially flavoured rice is a swindle." President Chávez commented: "I am tired of the situation where regulated rice is not being produced and for this reason I have ordered these plants to be put under state intervention. If they try any tricks we will expropriate them and these companies will go from being private property to social property," and added that "we should be moving towards socialism, not capitalism. We must build up social property, in which small and medium sized producers have a place". Regarding the property of the land he declared, "a key element of socialism is the social property of the means of production. What are the means or factors of production? Land, which is not private but social. If you put up a fence and are producing, or you have a warehouse, a house or cattle on that land, well, these assets are private. But the land does not belong to anybody, but to everyone."

On Monday, March 2, Guillermo Bolinaga, Director of Legal Affairs and Regulation of Empresas Polar, declared that the measures of state intervention were "disproportionate, illegal and unconstitutional", and that they would appeal to the Supreme Court of Justice against state intervention in their rice plant. With the usual cynicism of the capitalist representatives he alleged that, "the right of property, the right of food security and the sovereignty of the consumers to choose what they want to consume, have been violated." Bolinaga declared that his company has only a 6% share of the market (despite the well known fact that Polar is the main company in the food sector) and rejected the claim that they were producing 90% artificially flavoured rice in order to avoid price regulation. He said that the main problem in the rice sector was the low level of production of the raw material and that the government-regulated price was "not enough to cover production costs."

Minister of Agriculture, Elías Jaua, replied that Empresas Polar has a monopoly control of the market, and assured that Venezuela currently produces more than 300,000 tonnes of this cereal. "They say that there is not enough raw material while at the same time they are producing artificially flavoured rice. So, it is clear that they do have raw material, but they are using it to produce different varieties other than the regulated price rice." He added that, "when they are producing 90% artificially flavoured rice, they are in fact forcing the consumer to buy what they want".

From Tuesday, 3, the Bolivarian government decreed compulsory production quotas for all those companies producing cooking oil, white rice, sugar, coffee (both roasted and ground), maize flour, margarine, mayonnaise, pasta, cheese and tomato sauce. The aim is to make sure that the companies continue to produce these products rather than diverting the raw materials towards other non-regulated products. Carlos Osorio, the National Superintendent of Silos and Warehouses pointed out that, "if any company wishes to trample on consumer rights with the aim of getting higher profits, we will take action," and emphasised that "for the government, access to basic foodstuffs is a question of national security".

Cargill multinational expropriated

"They are finished… a transnational breaking the law… Get the decree ready because this is not going to be tolerated… Let the country hear clearly the instruction I am giving: let the process of expropriation of Cargill begin, as well as a legal enquiry because what they are doing is a glaring violation". With these words, President Chavez ordered the nationalisation of this important US-based food multinational. The measure was announced after the inspections in the plant in Portuguesa, which rice producers in the area had asked for after state intervention in other rice processing plants revealed that the plant is not producing basic regulated price rice, but rather packaging 2,400 tonnes of special presentation rice which is not covered by price controls. The inspection also revealed other violations, such as the smuggling of rice to Colombia under false documentation.

In a meeting of the Cabinet, broadcast live by state media, president Chavez announced the nationalisation of US-based multinational Cargill.
In a meeting of the Cabinet, broadcast live by state media, president Chavez announced the nationalisation of US-based multinational Cargill.

Cargill Venezuela produces oil (El rey, Deleite, Branca), butter (Tres Cochinitos), rice (Mi Mesa, Santa Ana), flour (Blancaflor, Gold Medal and Mi Mesa), pasta (Fiorentina, Milani, Mi Mesa and Ronco) and pasta sauce (Ronco). It also has a pet food division (Dogui, Gati, Robustin and Perrovita). It was not immediately clear whether the whole of Cargill's operations in the country would be affected or only the rice processing plants, but the President announced that a judicial investigation would be carried out into the company. Furthermore the President ordered the carrying out of an inspection of all the basic food processing plants: "I want an inspection of everything, all the plants which produce flour, maize flour, cooking oil, (…) the question of toilet paper (…) Everything must be checked (…) those who break the law, well, measures must be taken, strong measures, in favour of the people. This is to protect the people."

President Chávez also warned Empresas Polar: "I repeat, Empresas Polar, its owners might think they have royal blood running threw their veins, but if they do not accept the rules, mister Mendoza, we will expropriate you, I am warning you." This warning comes particularly after the statements of company representatives and the legal action they have taken. "We can expropriate all of their plants (…) and we will pay them with state bonds. This revolution is a serious business." He ordered Elías Jaua to prepare the expropriation decrees "one after the other". It is worth remembering that according to the Law of Food Security and Sovereignty, food was declared a matter of public interest, and therefore, expropriation proceedings should be quicker than in other cases. "It is just a question of you signing the decree and this will start the expropriation proceedings", explained Minister Jaua.

Now, nationalise the rest of the food industry under workers' control

Workers from all countries should enthusiastically welcome the announcement of this nationalisation. It represents an important step forward for the Venezuelan revolution and a further blow against capitalism and imperialism. It is in particular a slap in the face of the reformists and bureaucrats who continue to argue that the government should not nationalise companies. Marxists have explained more than once that the revolution is a living, dynamic process which we must analyse according to dialectical materialist laws, in order to identify the most likely development in a given moment. The truth is that despite the wishes of the reformists to conciliate and negotiate a truce with the Opposition, the latter is only interested in one thing: to defeat the Bolivarian revolution.

Even though the national government has offered an open hand to the capitalists, giving them generous grants, they have continued to use one of their most powerful weapons: low intensity war through economic sabotage. The stepping up of their tactic of hoarding basic foodstuffs, particularly milk, is what marked the year 2007. At that time we already warned that the easing of the regulation would not bring products back to the supermarket shelves, but would only add more basic products to the list of those which were already scarce.

This was one of the main arguments explained by Alan Woods during his speaking tour in Venezuela last June. "The argument of the reformists and Stalinists that the revolution must form a 'strategic alliance with the national bourgeoisie' is dangerous stupidity. Everybody knows that the bourgeoisie is the enemy of the revolution and socialism. It is not possible to form a 'strategic alliance' with the progressive national bourgeoisie which does not exist (…) Despite all the exhortations, the private capitalists will not invest in Venezuela." We repeated this in August. (See Alan Woods, The nationalisation of Banco Venezuela).

We should not forget that some of the companies that have been put under state intervention and are now being threatened with expropriation participated in the meeting between president Chávez and the capitalists less than a year ago, including the owner of the Polar group. How many months have been wasted because of the mistaken strategy of the reformists! As a matter of fact the Polar group could have and should have been expropriated immediately after the coup in April 2002, in which its owner Lorenzo Mendoza actively participated. Or in January 2003 after its key role in the bosses' lock-out. Or in February 2004, when the Polar lorries blockaded the roads as part of the guarimba counter-revolutionary provocations. Or in January 2008 when large amounts of hoarded products were found in Polar warehouses.

We saw how the nationalisation of the Lacteos Los Andes milk processing plant was a step forward, but it was not enough. The rest of the milk processing companies continue to sabotage the production of regulated milk products. With the exception of Inveval, none of the nationalised companies has been put under workers' control. At the beginning there was an attempt to introduce co-management between the state and the workers organised in cooperatives. The most recent nationalisations have meant a straight transfer from the private sector to the state, with a state apparatus which continues to have all the faults of a bourgeois state inherited from the IV Republic. The deficiencies and problems that have arisen in the nationalised companies are not the workers' fault, but on the contrary, are due to the lack of workers' control, the existence of a state bureaucracy and the sabotage carried out by the reformists and all sorts of counter-revolutionary elements which remain within the State.

A discussion has been reopened about the issue of compensation. The President has spoken of not paying in cash, but "in state bonds". Up until now the dominant idea had been that of the reformists of paying the full market value for these companies, as was the case with the telecom company CANTV, electricity generator EDC, and even in the case of the SIDOR steel mill. The same proposal had been made in the case of Banco de Venezuela, Grupo Santander. And for that same reason the process of nationalisation has been delayed, and an announcement has been made that this will not be carried out during 2009. The fall in revenue, due to the world capitalist crisis and the collapse in the price of oil, is ruling out the idea of nationalising the companies by paying large sums of money to their capitalist owners.

In his article Nationalisations in Venezuela: What do they mean for socialists, written in May 2007 at the time of the nationalisation of oil operations in the country, Alan Woods commented: "The question of compensation also is not a question of principle. Marx raised the possibility of buying out the capitalists in England. Trotsky also said that in the USA it would be possible to pay compensation to the capitalists in return for peacefully handing over the factories and minimise the possibility of violence. But what is not permissible is the reformist idea of buying the industries at market value, which would render the whole idea of nationalization impossible."

The big capitalists have made enormous profits on the sweat and blood of the workers. Furthermore, in the food industry the bosses have played with the food of the people, sabotaging and attacking us all, just because they are the "owners" of these industries. It would be enough to open the books of these companies to show how they have made massive profits through overexploitation of the workers, hoarding and speculation. There is no justification for these thieves to receive any money from the Venezuelan taxpayers. On the contrary, rather than being compensated, they should be brought to justice. As was the case with the assets of the managers of Stanford Bank, all assets of the managers of these companies should be seized. Similar measures were in fact adopted by Bolivar during the war of Independence. Even the US government carried out similar measures in the past, first in the war of Independence against the landowners who supported the British Empire, and during the Civil War against the slave-owners.

A first step in the right direction has been taken. But the only guarantee of food sovereignty would be to nationalise the whole of the food and agricultural industry so that it is run under democratic workers' control. This includes not only processing plants, but also the large latifundia. Agricultural workers, the real producers, should be brought together as workers of a national food producing company, publicly owned and managed by the workers. This would allow the planning and coordination of everything related to food, from production of the raw materials to the processing of the final products.

As we have explained before in the past, neither regulation of the market nor partial nationalisations can really solve the problem. The attempt of the reformists to control the capitalist market through price controls cannot solve the problem. In fact, it makes the situation worse, because it disrupts the normal working of the capitalist market without replacing it with democratic planning. As has been shown in the case of the rice processing plants, capitalists only produce with the aim of making profits. If they consider that regulated prices do not allow them a sufficient rate of profit, then they stop producing, even breaking the law if necessary. The conclusion that must be drawn is precisely that there is a fundamental contradiction between the needs and interests of the majority of the population and the private ownership of the means of production.

In his TV programme the President declared that "we must go to socialism, not capitalism (…) breaking with the bourgeois capitalist model (…) dismantling the superstructure which reinforces capitalist reproduction in the legal and constitutional fields (…) setting the basis for the building of a new model of production based on new production relations, new forms of property". The nationalisation of industry, banking and the land is the only way to put these words into practice, the only way to take the revolution forward.

Caracas, March 5, 2009

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