Land Reform in Venezuela

Daniel Drezner looks at Chavez's land reform and does not like what he sees:

Hugo Chavez approaches the Mugabe level of economic mismanagement

On Thursday the Wall Street Journal's Jose De Cordoba had a front-pager describing how Hugo Chávez's agricultural reforms are going:

Now Mr. Chavez is taking his revolution to the Venezuelan countryside. "We must end latifundios," he said in a televised speech in March, referring to large agrarian estates. "The people order it, and we will do it, whatever the cost." Then he announced the seizure of a land area larger than the state of Rhode Island.

Since coming to power, The Chávez government has handed over 8.8 million acres, an area bigger than Maryland, for use by the poor. While much of this was state-owned land that was either idle or leased to ranchers, some 4.5 million acres were "recovered" from private owners, Mr. Chávez said recently. In some cases, the government compensated them. In most others... it has simply turned a blind eye to land invasions.

The government bills land reform as a way to make Venezuela self-sufficient infood. But so far, the effect has been to undercut production of beef, sugar and other foods, as productive land is handed over to city dwellers with no knowledge of farming. Established farmers and ranchers, fearing their land may be seized next, are cutting investment in their operations to a minimum.

The chaos in the countryside has contributed to shortages in basic items like milk and meat, a paradox in a country enjoying an economic boom traceable to high oil prices. Also spurring the shortages are price controls on certain foods that keep them prices below the cost of production. Meanwhile, 19%-plus inflation--as oil revenue floods the economy--spurs panic buying: purchasing price-controlled and other goods the shopper might not immediately need for fear of having higher prices in the future or not finding the items at all.

"You get up at dawn to hunt for a breast of chicken all over town. Housewives are in a foul mood." says Lucylde Gonzalez, a Caracas homemaker, who says she hasn't seen an egg in a week."

Chávez has now reached the Robert Mugabe level of economic incompetence by messing with the farm sector. Let's hope he does not move past that to the Mao Zedong/Great Leap Forward level of economic mismanagement.

So who gets the land? Either slum-dwellers from cities who don't know how to farm (and will mismanage the land), or political cronies who won't improve the socioeconomic standing of the Venezuelan poor. Either way, another popular political action which is paving the way to national economic disaster.