Chavez guarantees his “cafecito” in the future

August 4, 2009

(Este post en español aquí)

chavez-cafe

After ten years of controls and interfering with coffee production and commercialization, The Chavez administration intervened on Monday the largest coffee processing companies in the country and today it decided to nationalize them so that at least the Dictator will have his own personal supply of “cafecito” ever morning.

But clearly, it would never occur to Chavez and his cohorts that they are the problem. Which happens to be the case, even if they continued the policies they inherited and added price controls. Veneconomia says that ten years of controls have dropped the country’s coffee production to a 20 year low. The whole chain of production has been unraveled by the stupid policies of the Government. Growers feel there is no point in increasing production, processing plants can’t get the product and the consumer can’t get enough of the product. With the price controlled and world prices higher there is contraband too.

The Government then takes it over and blame everyone but the sheer ignorance of its policies. Thus, Venezuela, traditionally a coffee producing country, will likely see chronic coffee shortages going forward. Coffee will go the way of sugar, milk and all those other products in which the Government decides to stick its big finger in and screw the whole thing up.

And Chavez will continue blaming everyone but himself…as long as he can have his “cafecito”

46 Responses to “Chavez guarantees his “cafecito” in the future”

  1. wsamples Says:

    Wasn’t it just about a year ago that Chavez was pushing for coffee to be the next great export hope? His plan was to use it as the brew offered at Citgo stations.

    http://cms.poorbuthappy.com/colombia/post/hugos-revenge-us-citgo-stations-to-start-selling-venezuelan-coffee/

    The link to the story in the Miami Herald is dead, but it seems to have been quoted in its entirety by the forum poster.

    That pie in the sky comes in a coffee flavor, too?


  2. […] Chavez se garantiza su cafecito en el futuro Agosto 5, 2009 (This post in English here) […]

  3. keplerito Says:

    amieres

    I am not Kepler but in homage to him I am using keplerito.

  4. amieres Says:

    Gracias por el articulo Kepler.

    And thanks to you Max for stimulating us into digging out the truth.
    It’s like they say: “statistics don’t lie, people do.”

  5. keplerito Says:

    Max

    Should we believe you or, for example, this report in today’s Tal Cual? Heck! looks like Daniel and Gringo could have written it together!

    “Los industriales del café no lo dicen, quizás presionados por el temor a las represalias, amenazados como están por la expropiación “si se portan mal”, pero entre los caficultores y entre los trabajadores de la industria la verdad es conocida.

    La “ocupación temporal” de las dos más importantes empresas procesadoras de café, es una medida tomada por motivos exclusivamente políticos, para causar un efecto en la opinión pública, ya que desde hace muchos meses el gobierno sabe que la cosecha 20082009 alcanzaría a lo sumo para cubrir el mes de Agosto y de hecho, el ministerio de Agricultura y Tierras ya tiene listo el contrato para importar 300 mil quintales del producto de Centroamérica y Brasil.

    A finales de Junio y durante la primera semana de Julio, funcionarios del ministerio junto con los de Indepabis inspeccionaron una a una todas las torrefactoras del país, incluyendo las dos intervenidas y todas las pequeñas, así como la propia planta del estado, Café Venezuela.

    Esa inspección arrojó como resultado que en promedio restaba café lavado y seco para ser tostado para entre tres y cuatro semanas.

    Por eso, sólo por motivos políticos y propagandísticos se puede explicar la acción de “ocupación” y las consiguientes “investigaciones” acerca de acaparamiento, del mismo modo que la amenaza de expropiar “si se comprueba contrabando de extracción” es la típica amenaza cuyo mensaje real es: “¡cállense! y no cuenten la verdad o lo perderán todo”.

    LA PEOR COSECHA
    EN DÉCADAS
    La cosecha 2008- 2009 produjo tan sólo poco mas de 1 millón de quintales (sacos de 46 kilos de café trillado, lavado y seco cada uno) cuando lo usual es que en Venezuela se produzcan entre 1.5 millones y hasta 2 millones de quintales.

    En aquellos meses finales de la cosecha, es decir, enero de 2009, el ministro de Agricultura, Elías Jaua polemizó con quienes denunciaban el fracaso de la política agraria y tras admitir la caída abrupta de la cosecha de café, lo atribuyó a “problemas climáticos” defendiendo la política de precios y crediticias de su despacho y del gobierno nacional.

    Ahora, Jaua habla de “acaparamiento” y “contrabando de extracción” para negar que la cosecha fue tan mala que era imposible que alcanzara para cubrir la demanda nacional del año completo.

    “Es verdad que el exceso de lluvias en el período febrero-abril de 2008, momento de la floración del café, estimulada por la sequía tradicional de esos meses, influyó para la caída de la producción, pero eso es sólo una porción de la verdad”, nos explicaron al alimón un caficultor mediano y un técnico que trabaja en una pequeña industria procesadora, quienes pidieron no ser identificados para evitar represalias.

    “El resto de la verdad, quizás en un porcentaje del 60% es que la cosecha baja es el resultado de al menos 5 años de abandono del sector y la desastrosa política de precios que han obligado a casi todos a reducir drásticamente sus costos, en cuanto a menos fertilización, casi nula reposición de cultivos, menos mantenimiento y reducción de la mano de obra”.

    Pedro Pérez, de Fedeagro dijo que el precio del café fue congelado por el gobierno durante 40 meses, período en el cual la inflación admitida por el Banco Central superó el 100%.

    “Con semejante mezcla, era inevitable que la caficultura disminuyera en cantidad y calidad. Si los salarios de los trabajadores suben, igual que los costos de vehículos de transporte, cauchos, repuestos, fertilizantes, viveros, equipos agrícolas, pero el producto se vende al mismo precio por tanto tiempo era inevitable la caída. Eso se juntó con un año de clima inadecuado”.

    IMPORTACIÓN
    Y CONTRABANDO
    No deja de ser verdad que en Venezuela hay contrabando de extracción de café. Eso es inevitable, sobre todo en Los Andes, cuando el quintal se le paga al productor (sea campesino, pequeño productor o gran hacendado) a más o menos 116 dólares, mientras en Colombia se paga dos o tres veces mejor e incluso en ocasiones llega al equivalente de 500 dólares.

    El gobierno se niega a mirar esa realidad y actuar con sensatez. Lo cierto es que el gobierno ya contrató la importación de 300 mil sacos, cuyo primer lote deben estar llegando a mediados de mes.

    “Tan triste es el manejo politiquero que el ministro Jaua y el Presidente Chávez hacen del tema”, insiste el técnico agrícola antes citado, “que los industriales del café le plantearon al gobierno que les vendiera a ellos parte de esa importación para poder mantener activas sus fábricas hasta la llegada de la nueva cosecha en Noviembre e incluso para no afectar el empleo de cerca de 40 mil trabajadores; pero funcionarios del MAT respondieron que todo sería procesado por la estatal Café Venezuela (antes Café Anzoátegui), pero ahora hacen la intervención, seguramente para usar la capacidad de procesamiento de Madrid y Fama de América haciendo creer al pueblo que han `rescatado’ la producción”. “

  6. Max Says:

    I did not write that Earthtrend’s data is “inaccurate,” but rather that it is not up-to-date; for cereal production, I cited its 2005 data, for 2009 I didn’t cite overall production numbers because there aren’t any. Stick to the words in front of you.

  7. Gringo Says:

    So Earthtrends has accurate data in one case but not in the other. That’s all I need to know.

  8. Max Says:

    Second paragraph should read

    “Right. So I was making two different comparisons, based on two different pieces of evidence: one, that even in 2005, cereal production had [past tense verb] increased by 50 percent since 1999, and that total food production is [a present-tense verb, e.g., referring to the present] up 24 percent. Read what I wrote. Words are being used carefully to mean what they mean, not what they don’t mean. Earthtrends was the citation for the 1st, not the second, source; for the second, I cited a presentation. This isn’t hard.”

  9. Max Says:

    Gringo,
    You seem interested in the facts. I am too. What you’re having more trouble with is reading comprehension. Here’s what I wrote:
    “Yet even in 2005, cereal production had increased some 50 percent since 1999. Total food production is up over 24 percent, with totals in key staple crops far higher.”
    Right. So I was making two different comparisons, based on two different pieces of evidence: one, that even in 2005, cereal production has [past tense verb] increased by 50 percent since 2005, and that total food production is[a present-tense verb, e.g., referring to the present] up 24 percent. Read what I wrote. Words are being used carefully to mean what they mean, not what they don’t mean. Earthtrends was the citation for the 1st, not the second, source; for the second, I cited a presentation. This isn’t hard.

    Actually, food production is a very interesting way to deal with the issue of trends vs. aggregate: something funny happened in 2002-2003, as you’ll recall, that may have interrupted an upward-trend in agricultural production, reducing it by 10 percent, whereupon when that funny thing ended, it resumed its upward course.

    Regarding sugar: this isn’t an issue of statistical literacy but rather the more basic type of literacy: you can either respond to what I write on the page or have an argument about what I didn’t write on the page. If I say “production has gone up since 1999” and cite the USDA database, and you want to say “you’re wrong!” that means looking at production in 1999, and then production in, say, 2008, and showing that what I wrote was wrong. Having failed to do that what you’re writing isn’t relevant.

    Regarding the discrepancy: I’m not “citing sources” [e.g. links] because it gets help up in the spam queue; it’s quite easy to google. You’ll see a different data series used by the USDA and another one provided by two different USDA reports, one from the agricultural attache in April 2009 and another one in Jan. 2009, both reporting different numbers for this year’s production, varying by close to 200,000 tons; the Jan. report gave a data-series that didn’t jibe with the BCV’s report. Can I explain this? No, I can’t.

    That you find it “interesting that a Chávez supporter such as yourself would not trust the data provided by the Chavista government,” is fine; I don’t automatically trust it and try to double-check numbers against various databases, if possible, preferably audited, because that’s the responsible thing to do in the case of production numbers, especially when different usually reliable sources give different numbers. Check out the most recent BCV report on the Venezuelan economy in 2008; it hardly looks like the data is being massaged there.

    @jsb: Agronomists recognize that Cuba has made a transition to a non-input, non-petrochemical-intensive, ecologically-sound agriculture; due to unsound macroeconomic policies, the incredible growth from ~1995-2005 has either been stopped or reversed. There’s a difference between agricultural practice and macroeconomic context.

  10. Gringo Says:

    Max :
    Your article titled “The Miraculous Increase of Venezuelan Food Production” claimed that from 1999 to 2005 grain production in Venezuela had increased 50%, and that total food production had increased 24%. You informed me that you used Earthtrends for your data.

    Here is what your Earthtrends source has to say on food production in Venezuela:

    Agriculture and Food — Agricultural Production Indices: Total production index
    1999 94.8
    2000 100.6
    2001 104.7
    2002 102.6
    2003 95.3
    2004 92.6
    2005 94.3

    According to the source you cite, from 1999 to 2005 total food production in Venezuela had not increased 24%, but had declined slightly. The source you cite does not support your claim.

    Earthtrends does report a 50% increase that you claimed in grain production from 1999 to 2005, but as total food production declined slightly, it appears it was an issue of robbing Peter to pay Paul.

    Let us look at your comment regarding the BCV sugar production data.

    The burden of evidence if you want to say production hasn’t increased since 1999 is to show that it has fallen since 1999. That involves trying to look to the most recent year’s production, not production data from 3 years ago and comparing it to 1997, your base year.

    Regarding the issue of sugar production, I used TEN YEARS of data from the VENEZUELAN GOVERNMENT. That is rather indicative of a trend, I would say, contrary to your claim. If you are unable to see that the 1999 index of 74.10 is greater than the production indices for all years except one from 2000 to 2006 , then that is simply another indication that you are statistically challenged, as shown by your throwing out the pre 1995-1996 coffee production data and going from a peak of irregular data.

    Regarding the discrepancy between BCV sugar production data and your cited USG source with no link provided, I would suggest that you write an article on the inaccuracy of Chavista statistics. This also suggests a case of keeping two books on the part of the Venezuelan government. I also find it interesting that a Chávez supporter such as yourself would not trust the data provided by the Chavista government.

    Earthtrends data search: Agriculture and food/ Agricultural Production Indices: Total production index/ Venezuela/2000-2005

  11. jsb Says:

    Max has held up Cuban methods of agriculture as shining examples for the hemisphere in Oil Wars comments. Kinda lost credibility with me right after I heard that….

  12. keplerito Says:

    Max

    Well, at least Daniel speaks from his experience, you speak from books that you do not seem to understand as it is clearly established by other comments in this thread.

    As for you refusing to reply to the pertinent “details” of Daniel long and comprehensive entry, details that are a reply to your earlier speculations by the way, it looks exactly what you do at Oil Wars when you dodge the hard pointed questions.

    It does not matter what blog you harass, you always end up skewered.

  13. Max Says:

    @marc in calgary, I was hesitant to go read some shmaltz over at Daniel’s, and was hesitant to read it. i did. what was it? an impressionistic account of a couple guys running sugar hobby farms. fascinating.

  14. Max Says:

    @Gringo: I said go to the USDA database, and I said “since 1999.” The burden of evidence if you want to say production hasn’t increased since 1999 is to show that it has fallen since 1999. That involves trying to look to the most recent year’s production, not production data from 3 years ago and comparing it to 1997, your base year.
    As for citing Venezuelan government statistics, generally they take forever to find because the websites are crap; hence Earthtrends makes my life easier.
    With that said, I’m finding great variance in reports for Venezuelan sugar production. One estimate is for 600,000; another for ~700,000, another for 800,000, often by the same agencies. The USDA gives production numbers for 2008 at much higher than those in 1997 or 1999. But those numbers don’t square with the BCV’s numbers showing a decline a sugar production with the numbers you posted.

  15. Floyd Says:

    island canuck-
    This is all very interesting.

  16. marc in calgary Says:

    Max, the blog entry at Daniel’s site that you seem to have difficulty finding, is the first entry. I am taking the liberty of posting this link here, just in case a mouse with scrolling feature is beyond your means, although as I’ve already covered, it is the first entry and shouldn’t require you to read the entire blog.

    http://daniel-venezuela.blogspot.com/2009/08/not-enough-coffee-too-much-ron-chavez.html

    the idea that people in Venezuela would be more willing to risk their future by working harder to produce more of anything, be it beef or rice or wheat or sugar or…. coffee, is really difficult to fathom. I can’t see it.
    The regulation of beef hasn’t worked in Argentina either… for the same reasons.

  17. Gringo Says:

    Max/Jewbonics:
    The USDA database says corn, sugar and wheat have all increased since 1999.

    You have no URL cited, but the Banco Central De Venezuela definitely does not agree with your claim with regard to sugar. Interesting that you have not cited any Venezuelan government sites. What does that say?

    1997 100
    1998 94.92
    1999 74.10
    2000 71.22
    2001 74.51
    2002 73.18
    2003 55.54
    2004 64.42
    2005 64.58
    2006 58.14

    From Boletín Mensual # 782 March 2009, which gives data from 2002-2006, and Boletin Mensual # 748 May 2006 (1999-2005), and Boletin Mensual # 682 November 2000 (1997-1999).

    http://www.bcv.org.ve/Upload/Publicaciones/bo782mar.pdf for 2002-2006

    I did not include the other 2 links because the software on the Devil’s site holds up comments with many links, but the naming protocol will be the same. Ex: for #682, substitute “682nov” for “782mar.”

    ( 1997 being the reference year. Sugar production for 2006 was 58.14% of 1997 production.)

  18. Isa Says:

    Wow! Revolutionary! Oil prices rise by 500%, consumption of coffee goes up by 15%, wow! The money really trickled down. These guys are good! The analysis is even better, wow! Gotta love the revolution!

  19. GWEH Says:

    Max is another one of those Borev type web projects. If he’s getting funded through VIO or Bernardo I have news for you: there is no money and VIO is being closed.

    As Steve says, you may become famous but not with Venezuela. Your ignorance is amusing.

  20. Steve Says:

    Max, keep up the good work you may become a famous writer one day!

  21. Max Says:

    Daniel,
    I would’ve read the post if you had posted a link to a specific article instead of directing me to read your entire blog!. As for the rest, I’d reply word-by-word but it doesn’t seem worth it; it’s entirely disconnected from reality [borderline antisemitic, chavistas are notoriously inefficient, and the rest. Frankly you seem a little unhinged and maybe you should calm down before you write anything else].


  22. Max

    I would suggest very respectfully for your own good that you stop digging the hole you placed yourself. You keep demonstrating that you have no idea how coffee production goes and on this respect Gringo is definitely closer than you. I am not sure if a ten year span is realistic but with coffee I would give AT LEAST a 5 year span beofre I dared to put a trend in words.

    A few things you do not know about coffee

    – 3 years until the first grains appear, 5 years until a coffee tree produces enough worth harvesting

    – diseases include “rolla” and other fungus

    -weather is crucial, not only as far as the dry and wet cycles go for the pant to grow, but in more archaic plantations to dry the beans since it is still done in parts under the sun

    – the seedling process to start a pant takes one year, at best, since you must start by selecting the trees you want to get your grains from. no matter how efficient you are, and chavistas are notoriously inefficient, a small farm can manage maybe 500 seedlings a year. part of them are destined to just replace the trees going to their natural death

    – and other assorted events such as a necessary “la soca” on occasion. events that can drop your plantation yield by at least a third for a given year.

    Thus you can imagine what happens when to thsi explosive mix you add price control, currency exchange and corruption.

    Now that I think of it, when I look at all of this Gringo might not be that far of the mark anyway. What is certain is that the policies of Chavez HAVE FAILED because if they had been successful Venezuela could be producing TWICE as much as what it did in the 90ies.

    I know that you have not gone to read my blog, but had taken the trouble you would have read that my friend had DOUBLED his production between 1995 and 2005 and that his plans were to double it once again BEFORE 2015. Instead now he is down to about 50% more than what he was producing in 1995, the first year of real harvest after an initial recovery of the coffee farm. The potential of Venezuela to DOUBLE its coffee production existed in 1999, but not only it has not happened that now we are importing coffee again as the crop goes down by 18 % (and I predict it will go down next year by as much as 10%).

    I went and checked your blog and I am impressed that someone who claims to be a Jew writes something borderline anti semitic. Fine, your right. But what this also tells me is that you are some kind of intellectual individual who writes out of books and magazines he reads whereas people like me deal EVERY day with people making a livelihood out the land they own and/or manage. When we read your words, it reeks of smoked up coffee rooms where revolutions are decided no matter what the people who will suffer the consequences think. You, my friend, like Chavez, NEVER had to make a living out of a farm in Venezuela. And it shows, badly, even if you are not the one that will pay for the consequences. Stick to Palestine, you might be more credible there.

    PS: Miguel, feel free to edit/erase this comment if it does not meet your standards

  23. Max Says:

    @Miguel the issue is consumption as it affects total imports or exports, that’s all.
    @Gringo: for 2005 vs 1999, go to the world resources institute Earthtrends database. For the other numbers, the footnote gives a presentation done in Jan. 2009 in CCS. That’s all I have.
    The USDA database says corn, sugar and wheat have all increased since 1999.

  24. Gringo Says:

    From the website ( Jewbonics) that Max shows shows in his postings, I found this article:
    “The Miraculous Increase of Venezuelan Food Production”

    Yet even in 2005, cereal production had increased some 50 percent since 1999. Total food production is up over 24 percent, with totals in key staple crops far higher.

    I would be very interested to find out where Max/Jewbonic got these figures. I would also be very interested to find out what Miguel’s friend Carlos Machado Allision thinks of the figures that Max/Jewbonic cites. My experience in looking for Venezuelan agricultural production statstics on Venezuelan government websites is that they are very diffricult to find to nonexistent. If Chavista agriculture is such a success, why would such statistics not be easily accessible?

    http://www.maxajl.com/

  25. moctavio Says:

    Consumption is influenced by many other factors which are irrelevant or have little to do with the producer and trying to reach conclusions about consumption of something due to Government actions is almost useless. If oil goes up in Venezuela, consumption of almost everything goes up, but tells you little about what is happening in growing a crop.

  26. Bridge Says:

    Not using statistics but just your eyes – I suggest to drive through the coffee producing areas as p.ex. Edo Trujillo … sooo many of the medium fincas and smaller fincas are not producing anymore ! They are covered by weeds , farns, climing plants etc. and if you can still see some coffee bushes you will see they are not that old , but nobody is working these fincas anymore. High crime rate which started about 2001, difficulties to get workers, to high costs compared to the price you get per quintales …. simply said: its not worth the effort

  27. Max Says:

    @Miguel, production and consumption are both important if we’re also discussing imports and exports, and why the country does one or the other.

  28. Max Says:

    @Gringo, when you average by decade, you’re correct that you smooth out irregularities in the data, there’s no question about that. I’m sure that’s “generally” the right way to go. When you smooth out irregularities, you end up with truisms like

    “Whether you deal with the data set that Max referred to, or the data set that Max referred to, the conclusion is the same: pre-Chavista era coffee production is higher than Chavista era coffee production.”

    Which leaves us nowhere if we’re interested in causation and not correlation.

  29. moctavio Says:

    Coffee production is what is important, not coffee consumption.

  30. Max Says:

    “What is undeniable is that the overall production in 10 years of Chavez administration has been 20% and 28% lower than any ten years from 1981 to 1999, and that is what matters in the end, not this trend or that trend. In 10 years of administration they should have at least one good year of production and it hasn’t happend yet.”

    Please. As I wrote, they arrested a decline that began in 1996/1997; now one can argue that this is not due to good policies but due to climactic vagaries or in a word luck but simply aggregating statistics tells us nothing about trends, which are always the point when analyzing economic performance. When you group by decades you’re overlooking inflection points. This is trivially obvious stuff. I don’t know why you’re intent on missing it.

    As for “try again,” and your insistence that “trends don’t matter,” go again look at the numbers: coffee consumption has declined year-by-year, every year from 1979 through 1998 (that’s a trend) whereupon they stopped declining and are estimated to have risen to 1.9kg per capita this year, from 1.6/1.7 in 2007 [a 10 increase, hence the word precipitous].

  31. Gringo Says:

    I have dealt with the issue of trying to discern long term trends out of irregular data sets, albeit not in coffee. Instead of graphs with 20 data points, I have dealt in graphs with hundreds of data points, and hundreds of thousands of such graphs. My take on the issue is that in dealing with irregular data points, instead of dealing with peaks, as Max has done with the 1995-96 data, to get a better idea of long-term trends you are better off dealing with averages, as amieres has done.

    The best way to deal with irregular data is to average. Period. That I learned the hard way. When you graph this data, as opposed to just looking at the numbers, you see the absurdity of ignoring the pre 1995-1996 data, as Max has done. As they say, a picture is worth a thousand words.

    As amieres has pointed out, the data set that Max refers to shows that pre-Chavista era coffee production averages substantially higher than Chavista era coffee production.

    Whether you deal with the data set that Max referred to, or the data set that Max referred to, the conclusion is the same: pre-Chavista era coffee production is higher than Chavista era coffee production. ( Similarly with housing units production, BTW.)

  32. amieres Says:

    Max
    “My point was about overall production and the trend-line, which you’ve ignored”

    The figures I mention ARE overall production which is a lot more important than trends. Because when you pick and choose this year or that year you can always find a trend to prove any point you wish to make. Coffee production varies a lot year to year due to climatic factors and others.

    What is undeniable is that the overall production in 10 years of Chavez administration has been 20% and 28% lower than any ten years from 1981 to 1999, and that is what matters in the end, not this trend or that trend. In 10 years of administration they should have at least one good year of production and it hasn’t happend yet.

    “without taking notice of the fact that per-capita consumption has risen precipitously”

    Not according to the ICO:

    Consumption in 1990/91 – 890
    Consumption in 2007/08 – 760

    Try again

  33. Gerry Says:

    So in the final analysis WILL WE BE ABLE TO BUY COFFEE OR NOT NEXT MONTH???

    This is the only criteria. – Screw the statistics.

    Any answers??

  34. Max Says:

    Amieres–
    “Max, the information from the ICO shows that the total production for 2000-2008 (6.4M bags) is 28.6% lower than the production for 1991-1999 (9.0M bags). Also the production of every single year since 2001 is lower than the production of every single year from 1986 to 1999.”
    You’ve correctly showed that when you aggregate numbers to prove a point, you prove the point you wanted to prove. My point was about overall production and the trend-line, which you’ve ignored. Well done beating the living hell out of a straw-man.

    To reiterate: if Chavista economic management actually reversed or stopped a decline that began in the mid-90s, it doesn’t make sense to attack Chavista economic policy as causing that decline.
    @Daniel, you inadvertently made my point; if coffee production started to rise again after the nadir year of 2004/2005, and coffee crops take 3 years to bear fruit, how exactly does it follow that Chavista economic mismanagement is to blame?

    Too much rain can kill coffee crops, too; rainy is highly variable temporally; no one has dealt with the point that year-to-year swings of 20 percent are totally normal in coffee production on a country-by-country basis, not just Brazil but across the board.

    @Amieres again: you twice make the point that Venezuela will have to import more, without taking notice of the fact that per-capita consumption has risen precipitously.

    @Miguel, how come I trust the audited statistics more than your “source”? Production in the 1990s didn’t hold fairly steady–just look at the data set! It started declining before Chavez even came into office, and if coffee bushes take 3 years to mature then it follows that the first 3 years of of Chavez’s government were the result of policies set in motion before he got into office.

    The trend-line is what’s relevant here, not the numbers. Pick another way to giggle at incipient economic collapse.

  35. amieres Says:

    I have to confess to being ignorant of the coffee world myself (I even rarely drink it).
    My analysis is solely based on the almost 30 years of information from the International Coffee Organization which is the one chosen by Max to reference.
    Just by looking at the graph data you can clearly see the slump in the last ten years compared to the previous 20.

  36. amieres Says:

    Sorry last paragraph should read:

    It’s the first time in history that we are going to have to import an important ammount of coffee.

    What I’m saying is that this is not a one year swing in coffee production, it’s a clear 10 year slump (accentuated with a big crash this year) that coincides with the arrival in power of Chavez.


  37. Amieres

    Just to bring a point. Past policies on coffee were not much better than chavista ones. Under Caldera II there was coffee importation, and big guisos, rumored with one of Caldera’s son.


  38. Max

    With all due respect you do not know much about Coffee crops. They are a small tree and it takes at least 3 years before they start producing any grain.

    From all what you wrote, one can realize that by ignoring this crude fact of life all what you write comes across as simply a crude defense of chavista economic, policies. In fact, you are not even able to mention “la rolla” as the most common disease of coffee plants, in the Andes. No one has advanced that cause, not even the government. And in Venezuela there no risk of frost like in Brazil to kill a coffee harvest. The implication is simple: bad policies are the direct cuase of coffee production variation.

    I invite you to read the post I wrote on this subject to show you how Chavez policies in the agriculture sector play in the fields, in real life, and not in the propaganda offices of Miraflores.

  39. amieres Says:

    Max, the information from the ICO shows that the total production for 2000-2008 (6.4M bags) is 28.6% lower than the production for 1991-1999 (9.0M bags). Also the production of every single year since 2001 is lower than the production of every single year from 1986 to 1999.

    I excluded the data for 2009 because that estimate is clearly wrong. According to the president of the “Asociación Venezolana de la Industria del Café” this year Venezuela will need to import approximately 230 thousand bags of coffee because inventory will have ran out by the third week of August.

    It’s the first time in that we are going to have to import an important ammount of coffee.

  40. Max Says:

    Miguel, you wrote in your (revised) post: “But clearly, it would never occur to Chavez and his cohorts that they are the problem. Which happens to be the case, even if they continued the policies they inherited and added price controls. Veneconomia says that ten years of controls have dropped the country’s coffee production to a 20 year low (see comments on that). The whole chain of production has been unraveled by the stupid policies of the Government.”

    First, Veneconomia may say that, but it appears to be inaccurate. Second, if there was a declining trend through 2004/2005, then it increased since then, although it appears to be declining again this year, then Chavista policies are probably not to blame–if you arrest a decline, then you’re not to blame, period. If you look at world numbers for coffee harvests, swings of +/- 20 percent are common and appear all over the data, constantly, in Latin American countries too. Are they all suffering from poor policies?

    So to (a) blame current Chavista economic polices for the short-fall of the harvest and then (b) claim that they have unraveled the whole supply chain really isn’t accurate. It’s baseless speculation.

    Now, the issue of price controls is a separate issue: some of this coffee may be escaping the domestic market before it can even be accounted for. You may dislike price controls, but that’s outside the scope of your criticism.

    I suspect the problems are almost entirely climactic/related to the plant disease that came over from Colombia, perhaps slightly exacerbated by the government’s price controls.

  41. Max Says:

    That’s not the point, Miguel. I’m happy to give you links to the production numbers, but I’m here saving you the trouble: the numbers you’re working with and your analysis aren’t on point here; this isn’t a question of politics or ideology but of accuracy and factual fidelity. Why won’t you change them? If a trend pre-dated Chavez and there’s actually very little evidence that Chavista policies have harmed Venezuelan coffee production, simply according to the year-by-year numbers (as opposed to keeping it stagnant, a rather different thing) then why did you write what you wrote above? I’t simply not true.

  42. Max Says:

    So says Veneconomia or you’ve looked at the data series? Like I said, coffee production has been declining almost year-by-year since the 1996/1997 harvest, so the causes for the decline pre-date Chavista economic (mis?)management. In 2001/2002 and 2004/2005 it was lower than it’s forecast to be this year. 2004/2005 was actually a nadir; since then it’s been recovering, although not to the levels of the early 90s. This is according to the International Coffee Organization which presumably audits its information. I ask that you make a correction: if a trend pre-dated Chavez then it’s a reasonable inference that the causes of the trend likewise preceded his presidency and can’t be reduced to his economic policies. Likewise it’s not a 20-year low; you should correct that. Finally, most analysts think this year’s decline–only with respect to the last year, whereas otherwise it’s an upward trend from 2004/2005–is due to heavy rainfalls that damaged the harvest. Easy to blame Chavez, but the story is a bit more complicated.

  43. Max Says:

    Do you just make this stuff up? A range of estimates put 2009 coffee production at roughly 850,000-920,000 bags. In 2004/2005 production was 630,000 bags–possibly related to the political and economic disruptions that were affecting the country during and just before the planting for that harvest. In any case, starting from 1995/1996 there is a clear downward trend in Venezuelan coffee production, before el diablo came to office, the confluence of several factors, including plant disease and years of under-investment in the coffee sector finally catching up.

  44. Otro Roberto Says:

    island canuck, I am afraid that the problem with these controls is not that the government does not get it (maybe not). I believe that their main goal is to exert control and be able to punish or reward with them. Whether or not they work or ever worked is inconsequential for them.

  45. island canuck Says:

    One small example is long duration milk.

    There is always a shortage with only one or two brands on the shelf, mostly never seen in Venezuela before.

    The last lot we bought was terrible with chunks of undissolved milk powder floating in it. Really appetizing in your morning tea or coffee.

    Early this week our local store received a few cases of “Mi Vaca”, a brand that is well known here in Venezuela. It disappeared in just a few hours while the other brands at the same price stayed on the shelves.

    This is just a small example for a problem that exists with almost every product we buy these days – margarine, mayonnaise, cooking oil, etc., etc.

    Things like chicken are often non existent or only wings & patas. Don’t even ask about the quality of meat these days. I’m going to have to trade in my teeth for some sharper ones.

    Price controls DO NOT WORK. They have never worked. Exchange controls DO NOT WORK. They have never worked.

    Our government just does not get it.

  46. Floyd Says:

    Either production will continue to drop quickly or they will plant every last bit of land with coffee and then find out later they’ll need an army of conscripts to harvest them. It might be like sugar in Cuba with a huge state apparatus heavily subsidized and run with unpaid labor. At least with soldiers and school children doing the harvesting they can claim a “profit”.

    Coffee will go the way of sugar, milk and all those other products in which the Government decides to stick its big finger in and screw the whole thing up.

    Where can an American go to find more information about how the Venezuelan economy is affecting the average person? Are stores often seeing shortages? Do you see empty milk shelves? Have prices increased dramatically each year? Or are they heavily subsidized to the point where they just don’t care about quality?


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