CARACAS, Venezuela — By 6:30 a.m., a full hour and a half before the store
would open, about two dozen people were already in line. They waited patiently,
not for the latest iPhone, but for
something far more basic: groceries.
“Whatever I can get,” said Katherine Huga, 23, a mother of two, describing
her shopping list. She gave a shrug of resignation. “You buy what they have.”
Venezuela is one of the world’s top oil producers at a time of soaring energy prices, yet shortages of staples like milk, meat and toilet
paper are a chronic part of life here, often turning grocery shopping into a
hit or miss proposition.
Some residents arrange their calendars around the once-a-week deliveries made to government-subsidized stores like this one, lining up before dawn to buy a single frozen chicken before the stock runs out. Or a couple of bags of flour. Or a bottle of cooking oil.
The shortages affect both the poor and the well-off, in surprising ways. A
supermarket in the upscale La Castellana neighborhood recently had plenty of
chicken and cheese — even quail eggs — but not a single roll of toilet paper.
Only a few bags of coffee remained on a bottom shelf.
Asked where a shopper could get milk on a day when that, too, was out of
stock, a manager said with sarcasm, “At Chávez’s house.”
At the heart of the debate is President Hugo Chávez’s socialist-inspired government, which imposes strict price
controls that are intended to
make a range of foods and other goods more affordable for the poor. They are
often the very products that are the hardest to find.
“Venezuela is too rich a country to have this,” Nery Reyes, 55, a
restaurant worker, said outside a government-subsidized store in the
working-class Santa Rosalía neighborhood. “I’m wasting my day here standing in
line to buy one chicken and some rice.”
Venezuela was long one of the most prosperous countries in the region, with
sophisticated manufacturing, vibrant agriculture and strong businesses, making
it hard for many residents to accept such widespread scarcities. But amid the
prosperity, the gap between rich and poor was extreme, a problem that Mr.
Chávez and his ministers say they are trying to eliminate.
They blame unfettered capitalism for the country’s economic ills and argue
that controls are needed to keep prices in check in a country where inflation
rose to 27.6 percent last year, one of the highest rates in the
world. They say companies cause
shortages on purpose, holding products off the market to push up prices. This
month, the government required price cuts on fruit juice, toothpaste,
disposable diapers and more than a dozen other products.
“We are not asking them to lose money, just that they make money in a
rational way, that they don’t rob the people,” Mr. Chávez said recently.
But many economists call it a classic case of a government causing a
problem rather than solving it. Prices are set so low, they say, that companies
and producers cannot make a profit. So farmers grow less food, manufacturers
cut back production and retailers stock less inventory. Moreover, some of the
shortages are in industries, like dairy and coffee, where the government has
seized private companies and is now running them, saying it is in the national
interest.
In January, according to a scarcity index compiled by the Central Bank
of Venezuela, the difficulty
of finding basic goods on store shelves was at its worst level since 2008.
While that measure has eased considerably, many products can still be hard to
come by.
Datanálisis, a polling firm
that regularly tracks scarcities, said that powdered milk, a staple here, could
not be found in 42 percent of the stores its researchers visited in early
March. Liquid milk can be even harder to find.
Other products in short supply last month, according to Datanálisis,
included beef, chicken, vegetable oil and sugar. The polling firm also says
that the problem is most extreme in the government-subsidized stores that were
created to provide affordable food to the poor.
But with inflation so crippling, many shoppers at those stores said the
inconvenience was worth it.
“It’s an enormous help,” said Ana Lozano, 62, a retiree who takes in
ironing to supplement her pension, who was waiting outside the Santa Rosalía
grocery. “That’s why there’s such a long line.”
The government appears keenly aware of the twin threats of shortages and
inflation as it prepares for the October election in which Mr. Chávez is seeking a new six-year
term. The price controls have been defended in government advertisements and
accompanied by repeated threats from Mr. Chávez to nationalize any company that
cannot keep its products on the market.
Vice President Elías Jaua has warned of a media campaign to frighten
Venezuelans into hoarding, which would provoke artificial shortages. Government
advertisements urge consumers not to succumb to panic buying, using a
proverbial admonition: Bread for today is hunger for tomorrow.
Francisco Rodríguez, an economist with Bank of America Merrill Lynch who
studies the Venezuelan economy, said the government might score some political
points with the new round of price controls. But over time, he argued, they
will spell trouble for the economy.
“In the medium to long term, this is going to be a disaster,” Mr. Rodriguez
said.
The price controls also mean that products missing from store shelves
usually show up on the black market at much higher prices, a source of outrage
for many. For government supporters, that is proof of speculation. Others say
it is the consequence of a misguided policy.
Emilio Ortiz, 52, a shop owner, said he could buy sugar and powdered milk
from his distributors only once last year. He gets cooking oil once a month,
but only about half of what he requests. He also said that profits were so low
on controlled products that he must raise other prices to compensate.
One of his customers asked if the store had Harina Pan, which is considered
the quintessential local brand of flour to use in making arepas, the signature
corn cakes that are a staple of the Venezuelan diet.
“There isn’t any,” Mr. Ortiz said. It would be like an American store not
having any Coca-Cola.
The customer asked if other stores nearby carried it.
“You can’t find it,” Mr. Ortiz said glumly.
If there is one product that Venezuela should be able to produce in
abundance it is coffee, a major crop here for centuries. Until 2009, Venezuela
was a coffee exporter, but it began importing large amounts of it three years
ago to make up for a decline in production.
Farmers and coffee roasters say the problem is simple: retail price
controls keep profits close to or below what it costs farmers to grow and
harvest the coffee. As a result, many do not invest in new plantings or
fertilizer, or they cut back on the amount of land used to grow coffee. Making
matters worse, the recent harvest was poor in many areas.
A group representing small- to medium-size roasters said last month that
there was no domestic coffee left on the wholesale market — the earliest time
of year that industry leaders could remember such supplies running out. The
group announced a deal with the government to buy imported beans to keep coffee
on store shelves.
Similar problems have played out with other agricultural products under
price controls, like lags in production and rising imports for beef, milk and
corn.
Waiting in line to buy chicken and other staples, Jenny Montero, 30,
recalled how she could not find cooking oil last fall and had to switch from
the fried food she prefers to soups and stews.
“It was good for me,” she said drily, pushing her 14-month-old daughter in
a stroller. “I lost several pounds.”
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