Venezuela’s rice, corn production rise as buyers loan farmers supplies
n western Venezuela’s Portuguesa state, Roberto Latini has successfully planted over 300 hectares of corn and rice, funded by an agriculture guild amid Venezuela’s economic challenges. These loans for fertilizers and seeds have revived staple crop production, aiding farmers coping with credit restrictions and inflation exceeding 50%. While this approach helps stabilize local agriculture, broader financial support remains crucial to sustainably boost output and counter long-standing production declines exacerbated by economic policies like price controls and fuel shortages.
TUREN, Venezuela/CARACAS (Reuters) – More than 300 hectares (740 acres) of verdant corn and rice planted by Roberto Latini in the western Venezuelan state of Portuguesa undulate under a bright sun and blue sky.
The growing crops – set to be harvested in September – were able to be planted only because Latini got funding for fertilizers and seeds from an agriculture guild, which has stepped in to front funding for farmers in the economically beleaguered country.
Venezuelan growers of rice and corn – staple crops for domestic consumption – have reversed a years-long slump in production thanks to loans of fertilizers and seeds from buyers, which are freeing up funds to invest in generators and other efforts to fight utility cuts, a dozen farmers said.
The loans – from at least six guilds in Portuguesa and 20 crop-buying groups nationally – come amid tight credit restrictions, which make traditional loans from banks nearly impossible to ink, and inflation of over 50%.
“One survives with the support of the guilds which offer the fertilizers,” Latini said as he gave a tour of his farm, adding output could grow more with more funding availability.
The terms of the loans, often paid back with the harvest itself, can still be prohibitive for some small growers.
Without more regular financing from banks, farmers told Reuters challenges will persist and some producers could shut their operations.
Agricultural production in Venezuela, which largely relies on national food output, has plummeted in the last decade after years of price and currency controls, land nationalizations, lack of fuel and failures in public utilities.
President Nicolas Maduro loosened currency restrictions in 2019, allowing transactions in dollars and giving the economy some breathing room. He has also employed an orthodox effort to reduce inflation with credit restrictions and lower spending.
Though “forward selling” of crops is common in other Latin American countries like Brazil, the practice is new and growing in Venezuela, local agricultural experts told Reuters.
Bank loans available to farmers in Venezuela total about $330 million, according to local consulting firm Globalscope. Much of that funding goes to producers of small-scale export crops like sesame and mung beans.
Credit availability is between nine and 12 times that figure in Bolivia and Colombia, according to government figures in those places.
“There is no protection for the (agriculture and ranching) sector in finance,” said Gerardo Mendoza, head of local agricultural consultancy Agrotributos.
The communications, agriculture and finance ministries did not respond to requests for comment. Neither did the central bank.
Source Link : https://theprint.in/world/venezuelas-rice-corn-production-rise-as-buyers-loan-farmers-supplies/2178457/
