Venezuela's Maduro halts restricted food sale plan

[Judi Lynn]

Venezuela's Maduro halts restricted food sale plan
By JORGE RUEDA / Associated Press / June 8, 2013

CARACAS, Venezuela (AP) — President Nicolas Maduro said Saturday that he has put a halt to a plan to restrict sales of 20 basic food products in Venezuela’s most populous state, a scheme critics had deemed rationing in disguise.

Officials in western Zulia state had said the plan to limit sales of items such as cooking oil, flour, chicken and toilet paper — all of which are subject to price controls — could begin as early as Monday at 65 supermarkets. But they never explained exactly how it would work.

Data on purchases would reside on computer servers to guarantee that individuals did not make multiple purchases of the same item in different supermarkets, they said.

‘‘It’s insane this idea, whoever got into their head, of a computer chip for purchases,’’ Maduro said in a speech televised on state TV.

Maduro said he asked Gov. Francisco Arias Cardenas, a socialist ally and former military officer, to scrap the planned restrictions on food sales and Arias agreed.

More:
http://www.boston.com/news/world/latin-america/2013/06/08/venezuela-maduro-halts-restricted-food-sale-plan/mD7qj2yvQHpzaMMFP2xEeK/story.html

[Judi Lynn]

1. Venezuela's Maduro scraps plan for food restriction

8 June 2013 Last updated at 20:36 ET
Venezuela's Maduro scraps plan for food restriction

Venezuela's President Nicolas Maduro says he has halted a plan to restrict the sale of basic food items in the country's most populous state, Zulia.

The scheme would have limited the number of packages of items such as rice, milk and sugar shoppers were allowed to buy.

The authorities said it was aimed at curbing smuggling to Colombia.

~snip~
The plan was devised by the authorities in western Zulia state, which borders Colombia.

It is not clear exactly how it would have worked, but it was meant to prevent shoppers from buying the same product more than once in a day.

The authorities said it was aimed at preventing people from buying large quantities of price-controlled goods in Venezuela only to sell them at a profit in neighbouring Colombia, where they are more expensive.

More:
http://www.bbc.co.uk/news/world-latin-america-22829583

[Socialistlemur]

2. They do need to do something

Maduro tends to put his mouth in gear before he thinks it through. The problem is real, and instead of shutting it down he needed to have an alternative. I think the best solution is food stamps. These could be issued to each adult and used to buy basic staples. Anybody wishing to buy over and above can do so but pay the price. What's happening right now is a huge surge in inflation, and the poor aren't able to buy what they need. In Zulia they have food smugglers buying subsidized food and smuggling it into Colombia. There it is sold for pesos which are changed to dollars.

Thus a food product purchased in Venezuela under price controls which assume the bolivar is worth 6.3 to the usd, can be sold for pesos in Colombia at a price equivalent to 30 bolivars to the usd. After deducting expenses for transport and commission to Colombians its possible to get about 4x profit. Because the penalty is zero once the food is n Colombia, and it's low in Venezuela, every Tom dick and Harry is packing loads over trails over the border. The food reaches Colombia, it's piled up and put in trucks....and resold back into Venezuela or sent on to Colombian towns. Either way it's an incredibly lucrative trade. It's so good there are reports now of Venezuelan packages showing up in Aruba and Trinidad. This means there's a sea trade using fishing boats.

This just can't go on, they have to devalue and they have to issue food stamps. The Zulia governor devised this solution out of desperation. Zulia is an oil producing state and he can't afford to have over one hundred thousand oil workers pissed off because they can't find food.