Venezuela - Agricultural Sectors Venezuela - Agricultural Sectors
Overview
Venezuela remains highly dependent on imported agricultural goods. However, the level of imports has drop significantly in the last five years. Official Venezuelan data about total trade in agricultural products are not available, U.S. agricultural exports to Venezuela fell from a high of $1.7 billion in 2012 to $406 million in 2017. In 2017, U.S. bulk commodity exports totaled $220 million. Wheat, at $79 million, represented 36% of this total. The export of U.S. intermediate agricultural products totaled $134 million. U.S. consumer-oriented products were $12 million, slightly above the $11 million exported in CY 2016.
Agricultural importers face a Venezuelan economic crisis that complicates the purchase of commodities due to hyperinflation and extreme restrictions on access to foreign currency. The GBRV maintains a stringent, prohibitively extensive bureaucracy to obtain permissions for importing agricultural products and access to foreign exchange. Despite these challenges, there are U.S. agricultural product exports that experienced marginal growth in 2017, including soybeans, meat products, sweeteners, snack foods, and animal fats.
State-Owned Enterprises
The Venezuelan Foods Corporation (CVAL) is a state entity that plays an active role in the commercialization, storage, and distribution of food supplies. CVAL groups supply both primary production and agro-industrial processing plants. It also has a support network for the distribution of inputs and provides mechanization and transport services through the companies created for that purpose.
The Government Food Distribution Network
On May 19, 2016, the GBRV created a company called Corporation of Productive and Alimentary Services (in Spanish: Corporación Única de Servicios Productivos y Alimentarios or CUSPAL) under MINPAL (Ministry of Foods) that manages all the state food imports, distribution and retail networks. This state-owned/operated company is responsible for purchasing domestically produced as well as imported food and agricultural products. The main MINPAL food agencies are:
- CASA purchases domestic and imported food and agricultural products. CASA is the sole importer of poultry, meat, coffee, raw sugar, and beef. It has also increased its imports of wheat and corn to be milled in both government and privately owned mills.
- MERCAL sells staple food products at prices about 30 to 45 percent lower on average than the controlled-price products sold by supermarkets. MERCAL’s food distribution network continues to expand, with 15,743 points of sale (mostly small stores, 35 supermarkets, and “home-cooking-houses,” or soup kitchens). The stores remain significantly undersupplied and mismanaged, causing long lines and unsatisfied customers.
- PDVAL, a PDVSA subsidiary, is ostensibly a food producer and distributor for the domestic market. PDVAL administers and supplies the Corporacion de Mercados Socialistas (COMERSO), which also manages commercial distribution programs.MERCAL (in Spanish: Mercado de Alimentos)
- There are also Abastos Bicentenarios, S.A. (which is about to be closed), the Foundation for Strategic Food Supply (in Spanish: Fundación Programa de Alimentos Estratégicos or FUNDAPROAL), and National Superintendence of Agricultural and Food Management (in Spanish: Superintendencia Nacional de Gestión Agroalimentaria or SUNAGRO) which play lesser roles in food regulation and sector oversight.
In September 2017, the GBRV created AGROSUR (in Spanish: Consorcio Agrosur), a state-operated business unit dependent on the Ministry of Agriculture and Lands (MAT) that manages all public food production and distribution networks, including what remains of Abastos Bicentenario. Certain commodities are expected to be produced within the consortium, which include coffee, sugar, cocoa, cereals and meat products. AGROSUR will also manage the sale and distribution of agricultural inputs as well as equipment and storage facilities.
The Private Food Distribution Network
Major supermarkets include varying types of chains that offer a comparable standard to U.S. retailers, such as Central Madeirense, Excelsior Gama, Plazas, Sigo, Makro, Flor, Frontera Unicasa, Luvebras, El Patio and Garzon. Most of the major supermarket chains in Venezuela belong to the National Supermarket Association (Spanish acronym: ANSA).There are approx. 6,363 privately owned supermarkets (both chain stores and independents) in Venezuela selling foods and beverages. There are an additional 136,906 corner stores, known as abastos or bodegas. Corner stores dominate retail sales in the predominantly middle and low-income neighborhoods throughout Venezuelan cities and towns.
Pharmacies that offer foods and beverages were growing rapidly in the last decade. The store layouts now include aisles dedicated to food and beverages. The four major pharmacies are SAAS (208 stores), Farmatodo (170 stores), Farmahorro (114 stores) and Locatel (66 stores). These pharmacies are members of ANSA.
Government Spending
Given the government’s professed commitment to provide food subsidized through MERCAL and CLAP, expenditures (particularly for price-controlled foods) are expected to continue and demand is expected to rise; however, hard data on import dependence and projected increases are difficult to estimate. While imported food accounts for a growing percentage of domestic consumption, the overall quantity of imported food has steadily diminished and does not adequately provide for demand.