January 21, 2008

Venezuelan government raises milk prices, warns to seize hoarding dairies

Venezuelan president, Hugo Chavez, raised the price for unprocessed milk and threatened to seize dairies that hold back milk supplies.

The government raised milk prices up to 36 percent to US$0.70 cents a litre, in efforts to increase supply amid widespread shortages.

It guaranteed agricultural producers loans with an interest rate of 4 percent and a two-year grace period to help increase output.

Meanwhile, the president voiced threats to private milk processors, cattle farmers and land owners in an attempt to resolve the shortages. Chavez said dairy companies are hoarding milk supplies to destabilize the government.

Venezuelan officials are working to remedy milk shortages to lower Venezuela's inflation rate, currently the highest in Latin America.

On Chavez's visit with cattle farmers in Zulia state in western Venezuela, he proposed for the creation of agricultural districts, under which assemblies of government officials and ranchers would come up with formulas to boost output through centralized planning.