by PressVenezuelan rice and corn growers have new opportunities for development
Venezuelan rice growers plan to expand operations
After years of decline, Venezuelan rice and corn growers are increasing production. The government is supporting them by offering a range of incentives. For example, the Venezuelan agricultural guild is financing the purchase of seeds and fertiliser.
Such support from the authorities is crucial in the current economic climate. Venezuela, which is under sanctions, is experiencing a severe crisis that is negatively impacting the agricultural sector. Local producers have limited resources and cannot operate at full capacity. They can invest their funds to expand their operations thanks to government funding. Farmers are also planning to purchase generators to reduce the cost of electricity and equipment to cultivate plots.
It is worth noting that Venezuela’s rice and corn production are strategic sectors. They are the most important crops on the domestic market. Moreover, their consumption is increasing every year.
Pros and cons of lending
Both local and foreign organisations provide loans to farmers. About six guilds from Portugal and 20 institutions from Venezuela work with farmers. They offer loans with flexible repayment terms, distinguishing them from traditional ones. The country’s restrictive policy makes obtaining financing from local banks almost impossible. Rising inflation, which is now over 50%, exacerbates the situation.
Farmers say guild support helps them stay afloat. These organisations provide fertiliser and cover part of the cost of seeds, allowing some farmers to make a profit and expand production. Despite this support, however, small farmers face serious difficulties. The guilds offer loans repaid with the harvest, and interest rates are high for small farms.
Challenges for the industry
According to Reuters analysts, the industry needs regular financial support. And it should come not only from agricultural organisations but also from banks. Otherwise, the problems will get worse:
1. Rice and corn production will not be able to expand due to lack of funds.
2. Limited supply will lead to higher prices for products on the domestic market.
3. Given the economic constraints, imports will be quite costly for the country.
4. Vulnerable sections of the population risk being unable to afford products that are part of their daily diet.
It is worth noting that the rice and corn sectors are not the only ones experiencing difficulties. The agricultural sector in Venezuela has been in decline for the past ten years due to the tightening of price and currency controls and the large-scale nationalisation of land. The country is also experiencing fuel shortages and disruptions in providing public services to the population. All of this makes agricultural activity and profitability much more difficult.