Veneconomy wrote this Editorial today. I was going to write about this problem, but it is very clear as spelled out by Veneconomy. This is a clear example of the arrogance of the Government. It passes laws to protect workers, which increase costs, but costs can’t be passed to prices and the solution is to import at an exchange rate for which only the Government has access. Of course, this will only be possible for as long as there is sufficient oil income. In the meantime, local industry is ruined, as it can’t compete with other countries, under prices controls, a fixed exchange rate for which the Government has ample access and 17% inflation (and growing!), which adds to costs. As Veneconomy suggests, why not talk? Why not look at costs structures and make rational decisions? Is that too much to ask or are they going to wait until there is no money or no industry? This is how you destroy a country from the top down, or from the bottom up. In the end, there is just nothing.
So What! We will import! By Veneconomy
Today, Venezuelans who went to buy their meat were surprised to find that storekeepers are no longer prepared to sell it. The reason? The government-regulated retail price is below the price at which wholesalers buy the carcass dressed. If we then add the pressure to which retail meat outlets are subject from Indecu, Seniat and other government agencies, retailers find themselves in an unsustainable position.
Meat has now joined the other basic products that have been disappearing off the shelves, among them sugar, milk, oil, pulses and coffee. This is just a tiny example of how the government’s control policies are worsening the food problem, one of the three basic problems affecting the population, the others being insecurity and lack of housing.
Faced with this situation, the government has once again come out with its habitual response: it is to import large quantities of meat to fight the “speculation,” which it alleges is being generated by the production chain.
Why, instead, hasn’t it occurred to them to calculate the true costs of cattle rearing in Venezuela?
They should do the math to see how much a cattle rancher has to lay out on raw materials, veterinary services, medicines, technology and maintaining infrastructure. In addition, they should calculation the high costs of the labor laws (e.g. Lopcymat) and of security measures (protection payments). Then there are amounts they have to spend to keep their land free of squatters and rustlers and to continue producing in the face of the legal uncertainty hanging over all the country’s landowners.
After doing those sums, the government should also bear in mind that cattle production in Venezuela is extensive (labor intensive) rather than intensive. And that now this trend has been reinforced more than ever before, because who can invest in new technologies and improvements and make capital investments if the legal system does not guarantee ownership?
Moreover, the people currently in the driving seat in Venezuela must know that, in the countries they are going to import the meat from, agriculture and cattle rearing are subsidized and protected by the government -as happens in many parts of the world-, since they are strategic industries and provide jobs. Put another way, it looks as though the Hugo Chávez administration is, once again, going to help maintain and increase employment in other countries at the expense of employment at home.
How much longer can this substitution of domestic production with imports continue? What about the food sovereignty the government makes such a fuss about?
If the country really mattered to the government, it would sit down to dialog with the producers and establish true costs and then see how it could promote investment so that Venezuelans, instead of loosing out, have new sources of employment and domestic production doesn’t shrink.
The Devil's Excrement 
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