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Venezuela: "And now your ranch is ours"

From The Economist

Jan 13th 2005 | SAN CARLOS, COJEDES | The rights and wrongs of agrarian reform, Chávez-style. FOR any self-proclaimed revolutionary keen to polish his anti-imperialist credentials the cattle ranch of El Charcote in Cojedes, a state in Venezuela's northern plains, is a tempting target. Its 13,000 hectares (32,000 acres) of sprawling pastures and woodlands are owned—along with a dozen other ranches elsewhere in the country—by Britain's Vestey Group. It tops the list of what Hugo Chávez, the country's leftist president, sees as under-used latifundia, ripe for handing out to his peasant supporters.

Mr Chávez has not resisted temptation. On January 8th, the clatter of helicopters over the ranch heralded the arrival of Jhonny [sic] Yánez, the chavista governor of Cojedes, bearing the country's first “intervention order” against rural property. He was accompanied by some 200 troops and heavily armed police commandos. Mr Yánez, a former army captain, announced that private property was “a right, but not an absolute right”.

A state commission now has three months to decide whether the ranch is “unproductive” or not legally held and thus can be turned over to peasant co-operatives under a controversial land-reform decree of 2001. Since Mr Yánez had bused in potential members of the future co-operatives to the ceremony, the decision is hardly in doubt. The Vestey family may be as famous in Britain for its long history of (legal) tax avoidance as for meat (it has investments in beef and sugar in Argentina and Brazil as well as in Venezuela). But its title to El Charcote goes back a century and has been upheld by the courts.

Two days later, Mr Chávez set up a similar commission at national level. Its task is to speed up and bring order to the president's land-reform drive. This has featured much incendiary rhetoric, a proliferation of land-reform agencies, six ministers and the abolition (since reversed) of the agriculture ministry. It has also prompted hundreds of land invasions and the killing of dozens of peasant activists by opponents. But very little land has been awarded. “That's a self-criticism the revolution has to make,” says Rafael Alemán, the official in charge of the review at El Charcote. “We have not pushed this process forward.”

The case for land reform in Latin America is a powerful one—albeit less so than it was. In Venezuela, over 75% of farmland is controlled by fewer than 5% of landowners. Rural poverty is a visible blight. Unequal land distribution is one of the historical causes of the wider inequality that scars Latin American societies. It is, says Mr Chávez, “an injustice” that must end.

Yet nine out of ten Venezuelans now live in cities. The government itself is by far the largest rural landowner: it owns more than 8m hectares of farmland, at least half of which has never been properly surveyed. It has no data on how many peasants need land, nor where they are. Land reform is not new: the democratic governments of the 1960s and 1970s (now much reviled by Mr Chávez) distributed 13m hectares of land to some 400,000 families. But it was (and still is) hard to make a living from farming. Oil wealth distorted the economy, millions left for the cities and land distribution remained skewed.

Mr Chávez says land reform will offer “food security” as well as helping poorer peasants. But critics say his policies have the opposite effect. By harrying the private sector, the government has merely intensified Venezuela's dependence on oil—and all the economic distortions that go with that. The government says Venezuela imports 70% of what it eats. The opposition retorts that food imports have risen by a fifth since Mr Chávez came to power, while agricultural production has fallen.

Land reform of the chavista style carries heavy costs. The president's promises have encouraged both genuine peasant groups and opportunists to invade farms. Mr Chávez controls the courts and the National Assembly. So politics rather than law will determine who loses land—and who gets it. “Social justice cannot be sacrificed to legal technicalities,” Mr Yánez says. This assault on property rights is likely to scare off investment.

Back at El Charcote, herds of Brahma cattle still graze. The Vestey company normally supplies 4% of the beef consumed by Venezuelans. It has been a pioneer in genetic improvements to the national herd. But Diana dos Santos, the firm's local boss, says that at El Charcote all but one small pasture has been invaded; beef output has slumped. More than a thousand interlopers have put up rickety shacks and planted crops on the estate. They support the president—but despise Mr Yánez. So they may be evicted in favour of other, more reliable, political clients. And in a few years' time these in turn will probably end up back in urban slums, while Venezuela will have lost a source of wealth.

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