Page last updated at 00:25 GMT, Sunday, 1 March 2009

Chavez sends army to rice plants

Venezuelan President Hugo Chavez. Photo: 28/02/09
President Hugo Chavez has instituted sweeping reforms in 10 years in power

Venezuelan President Hugo Chavez has ordered the army to take control of all rice processing plants in the country.

Mr Chavez accused some firms of overcharging by refusing to produce rice at prices set by the government.

He warned that some companies could be nationalised if they tried to interfere with supplies of the grain.

Mr Chavez - who has nationalised large swathes of Venezuela's economy - did not say how long the government intervention would last.

Major rice processors in the country include the US-owned giant Cargill and Venezuela's main food company, Polar.

Last year, Venezuela seized control of plants and offices belonging to Mexican cement giant Cemex.

In 2007, the government said it had taken control of the massive Orinoco Belt oil projects as part of President Chavez's nationalisation drive.

Price squeeze

Announcing the move to send troops to the rice plants in a televised address to the nation on Saturday, Mr Chavez criticised the producers for failing to sell their rice at government prices.

"I have ordered the immediate intervention in all those sectors of agro-industry, intervention by the revolutionary government," he said.

Generic picture of rice
Venezuela has strict price controls on staple foods such as rice and wheat

"This government is here to protect the people, not the bourgeoisie or the rich."

He said that those companies who had threatened to paralyse rice production could be expropriated.

"I will expropriate them, I have no problem with that, and I'll pay them with bonds. Don't count on me paying with hard cash," he said, without mentioning any companies by name.

The agriculture minister later confirmed that the military were in control of at least one major national producer, Primor, the BBC's Will Grant reports from Caracas.

Further interventions are expected in the next 48 hours.

In Venezuela, the government provides basic foodstuffs at low prices in state-run markets known as "mercales".

But many rice, wheat, meat and dairy producers complain that the price regulations leave them without a profit and that many are facing bankruptcy, our correspondent says.

The country's inflation levels are the highest in Latin America and, as a result, there are often shortages of items such as rice and coffee, leading to hoarding and sale on the black market.

With President Chavez recently granted the right to stand for a third term in office, he is keen to ensure the provision of cheap food to the poor is not put in jeopardy, Will Grant adds.

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