Chavez Moves to Nationalize Food Companies

Venezuela's top food company Empresas Polar called Thursday for talks with the government after President Hugo Chavez threatened to take it over and nationalized a unit owned by a U.S. food giant Cargill.

With the threats and the move against Cargill, Chavez has renewed a two-year nationalization drive just weeks after he won a referendum allowing him to run for re-election.

Howard Yanes / AP Hugo Chavez

He threatened Wednesday to seize Polar after sending troops to take over operations at some of its rice mills on charges the company was not producing enough of the grain at government-regulated prices.

"We have maintained that the best way to increase Venezuela's food (production) is through dialogue and close collaboration between the government, agricultural producers ... and consumers," Polar said Thursday in response to Chavez's threat.

Chavez has often followed through on his nationalization threats, taking over oil, electricity, steel, cement and telecommunications companies.

Sometimes, however, threatened companies have averted seizures by bowing to Chavez's demands.

The anti-U.S. president is popular among the poor for pressuring companies to produce cheap goods and for government programs that provide subsidized food in city slums.

But Polar, the producer of Venezuela's top beer brand and key staple products such as corn flour, is also highly regarded among the OPEC nation's poor.

Chavez, an ally of Communist Cuba, said the seizure of rice mills belonging to Polar this week was temporary but warned he could take over the whole company permanently if it kept defying him. He accuses the food industry of skirting price controls and failing to produce enough cheap rice.

The recent moves to tighten the government's grip over food supplies are criticized by the private sector and many economists who say it could contribute to food shortages.

One of the United States' largest privately-owned companies, Cargill employs 2,000 people at a dozen plants in Venezuela.

It was not clear if Chavez intends to expropriate Cargill's local operations or just its one rice plant. Cargill said Wednesday night it was "respectful" of Venezuela's decision but seeks talks to resolve the situation.

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