Food rationing in Venezuela

Guardian:

At first glance the supermarket off Avenida Francisco Miranda appeared to be a gourmet dream. Smoked salmon in the freezer. An aisle filled with Italian olive oil, balsamic vinegar and pesto. Another aisle stacked with Perrier, champagne and the finest Scotch.

But of milk, eggs, sugar and cooking oil there was no sign. Where were they? The question yesterday prompted a puzzled look from the manager. "There isn't any. Everybody knows that. Pasta is probably the next to go," he shrugged.

Welcome to Venezuela, a booming economy with a difference. Food shortages are plaguing the country at the same time that oil revenues are driving a spending splurge on imported luxury goods, prompting criticism of President Hugo Chávez's socialist policies.

Milk has all but vanished from shops. Distraught mothers ask how they are supposed to feed their infants. Many cafes and restaurants serve only black coffee.

Families say eggs and sugar are also a memory. "The last time I had them was September," said Marisol Perez, 51, a housewife in Petare, a sprawling barrio in eastern Caracas.

When supplies do arrive long queues form instantly. Purchases are rationed and hands are stamped to prevent cheating. The sight of a milk truck reportedly prompted a near-riot last week.

Up to a quarter of staple food supplies have been disrupted, according to Datanalisis, a public opinion and economic research group. To Chávez's detractors the scarcity is evidence that his revolutionary "21st century socialism" is driving South America's oil power towards ruin.

Government price controls on staple foods are so low that producers cannot make a profit, they say, and farms and businesses hesitate to invest in crops or machinery, or stockpile inventories, for fear of expropriations.

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Despite the problems Chávez remains popular and is expected to win a referendum next month which will abolish term limits, enabling him to stand for continuous re-election and fulfil his wish to stay in power until 2021 or even 2030. Some analysts warn that populist policies are aggravating the "oil curse" which floods oil producers with cash and makes it cheaper to import goods than to make them.

Well-connected people who can exploit the black market are fuelling a boom not only in luxury food and drink but also cars and holidays. Chávez has railed against the soaring imports of Scotch and Hummers, saying they undermined the effort to create a socialist "new man".

Chavez is not smart enough to run a command economy. No one is. Try to figure out how many eggs and slices of bacon are needed in New York City everyday. It defies calculation and if a central authority dictated a number it would either be too large or too small. These kind of problems constantly plagued the Soviet economy where people had to stand in line for a loaf of bread. If Chavez were smart he would let the market set the price for the scarce goods. That is the magic of how enough eggs and bacon get into New York City everyday.

The guy does not seem to mind the market setting the price of oil especially when that price is high and he is a seller, but when it comes to other sellers he does not trust the market. Go figure.