Increase in diesel, “hard blow” that worries the agricultural sector of Venezuela

The increase in the price of diesel for the industrial sector in Venezuela does not guarantee permanent supply to the country’s agricultural producers who fear an increase in the cost on the black market, to which they have been forced to resort in the constant periods of fuel shortages. .

The unions involved reiterate that diesel is “vital” for food production: it is required to carry out mechanized field work, activate electric generators in the face of constant service failures, and transport products to consumption centers.

“It is like water for human beings”, sums up VOA Armando Chacín, president in charge of the National Federation of Cattlemen of Venezuela (Fedenaga) while insisting that the primary sector must be “prioritized” and should not be considered as an industrial sector.

For Celso Fantinel, president of the Confederation of Associations of Agricultural Producers of Venezuela (Fedeagro), the increase in diesel to 0.32 dollars is a “hard blow” for the sector and exposes concern about the imminent increase by resellers .

“How is it going to be? two dollars, three dollars? Already sometimes the black market had reached $0.60. Large producers paid diesel at 0.20 or 0.25 dollars. Small producers were subsidized, maybe they paid 0.09 dollars because the Ministry of Agriculture made some deliveries ”, he explains to VOA.

The resellers, historically present at the borders, have now become common in many cities where there are shortages: they take advantage of the situation to earn additional income and offer each liter of gasoline between 1.5 and 2 dollars, even more. Thus, fuel in Venezuela is no longer the cheapest in the world.

Fantinel states that the sector he represents does not refuse to pay the price required by the oil industry to guarantee the production of diesel, but points out that, in Venezuela, where there is currently “no credit or financing” for small and medium-sized producers, makes survival unfeasible.

Only 15% of the large producers, according to the Fedeagro representative, is able to pay for the diesel that, in addition, he assures they receive with up to “10% or 20% of water”, which damages their work equipment.

“We have seen producers who sell second homes, cars, tractors in order to survive. It is uphill for the producers that we managed to increase the area planted, having sovereignty becomes uphill for Venezuela, which has all the characteristics and the soils,” he maintains while recalling how production was managed to recover after a drop of up to 80%, four years ago.

According to calculations based on planted area, on average, 16,000 barrels of diesel are required per day in Venezuela, the equivalent of about two million six hundred thousand liters. Only in the production of corn the mechanization process would register an increase in prices of 8% and in rice more than 20%.

Fantinel details that the crises are unleashed at planting and harvest peaks because, unlike years ago, distributors do not have reserves.

“It is where the producer is distressed, it is where the black market begins,” he says.

Impact on planting plans and food prices

Fedenaga warned that the measure, which excludes the agro-productive sector as a priority, will “negatively” affect the results of planting plans and the price of food and asked to issue “necessary and precise” instructions that lead producers to overcome the crisis.

“It can have repercussions in a technical paralysis of production activities and consequently in a significant decrease in the supply of food for our population,” warns the union in a letter addressed to President Nicolás Maduro.

In addition, it considers it “prudent” to evaluate the price adjustments and their consequences “at another time” and not precisely in full development of the winter cycle production plan, at which time “the largest volume of corn sowing is carried out ” and paddock maintenance “becomes more demanding”.

In Chacín’s opinion, the price of diesel should be reviewed by state and on the basis of their respective particularities and needs. He adds that, if solutions are to be achieved, it is necessary to adapt the cost structures in the midst of a situation in which the “Venezuelan consumer does not obey supply and demand because he does not have purchasing power.”

“We have made superhuman efforts, but it escapes our hands and pockets and represents a very difficult issue, it is less production for the country. We have the same capacity and interest in producing food, but we must address it with the Executive in order for us to have some success ”, he stated to VOA.

Fedenaga reiterated that the diesel supply does not meet operational needs “given its scarce or no availability” in producing areas, and made available to the government the “extensive and experienced network of technicians and producers” for the purpose of “planning jointly a viable and timely fuel supply schedule”.

According to Fantinel, agriculture and livestock in the country, with seventeen agricultural states, generates an economic environment of more than twelve billion dollars and a good part translates into “taxes” that could be used to support the production of diesel by Petróleos de Venezuela (PDVSA).

The decline in the agro-industrial sector is significant. Fantinel explains that, in many areas, including sugar cane, rice and corn, it can be compared to the sixties and eighties.

On several occasions the country’s agricultural sector has insisted on its commitment to increasing production in Venezuela and has demonstrated its “sacrifice”, but it insists on denouncing that fuel shortagethe absence of bank financing, legal insecurity and deficient infrastructure are some of the factors that negatively affect them.

Maduro has referred to the need to regularize the diesel supply, but the crisis in the countryside does not stop. The Venezuelan government attributes the spikes in fuel shortages to the sanctions imposed by the international community.

But, on several occasions, trade unionists from the deteriorated oil industry and other experts in the field have warned and agreed that, as a consequence of years of corruption, the lack of investment, maintenance and qualified personnel, the refineries in Venezuela, all state-owned, they were in a state of “operational collapse” that limits the possibility of producing the necessary fuel to supply the internal market.

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