Venezuelans battling soaring food prices

By Fabiola Sanchez
Associated Press / May 30, 2011

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EL TIGRE, Venezuela—Soaring food prices are forcing many Venezuelans to change their eating habits, trim their shopping lists and set aside more of their earnings to feed their families.

The oil-exporting country is coping with one of the highest inflation rates in the world: 22.9 percent as of last month, and food prices are rising even faster.

"It's gotten 100 percent worse," said Evelyn Villamizar, a 29-year-old student who is raising a 5-year-old son in a poor barrio of the Venezuelan capital, Caracas. She said she feels "strangled by the prices."

"If you have enough for one thing, you don't have enough for another," said Villamizar, who was picking up her son at a public school that provides a free daily snack.

She shops at subsidized state-run markets when she can but dreads the long lines, which can sometimes take hours of waiting.

She said the situation has forced her to rethink which foods she buys. For example, she said, "instead of meat, eggs."

Venezuelans have long coped with high prices, but in the past two years the impact has been felt more strongly because inflation has been outpacing salary increases, said Ricardo Villasmil, a professor at Caracas' IESA business school.

The poor have been particularly hard-hit. Villasmil said that official figures show the poorest one-fourth of Venezuelans now spend 45 percent of their income on food.

High prices and sporadic shortages of some foods have weighed on President Hugo Chavez's popularity, though he has held on to the support of about half of Venezuelans, said Luis Vicente Leon, director of the Venezuelan polling firm Datanalisis.

Chavez's socialist-oriented government has tried unsuccessfully to tame racing inflation with price controls on many food items, neighborhood meal programs and massive imports of products that are sold through cut-rate state-run markets.

He also has regularly raised the minimum wage, though government figures show that the average Venezuelan's buying power has shrunk 14.5 percent in the past four years.

Last year, the median salary grew 22 percent, lagging behind 27 percent inflation.

Venezuela's skyrocketing prices are an anomaly in Latin America. The country's food prices shot up 33.7 percent during the 12 months ending in March, far above the average increase of 7.7 percent for the region as a whole, The U.N. Food and Agriculture Organization said.

While Chavez often blames speculators for the price rises, many economists say his government's lavish spending is partly to blame.

Angel Garcia Banchs, an economics professor at Venezuela's Central University, said the money supply has expanded faster than production of the goods it can buy.

During Chavez's 12-year presidency, the amount of currency circulating in the economy has increased about 160 percent in real terms, adjusted for inflation. If inflation isn't taken into account, the money supply was about 29 times bigger in December 2010 than it was in December 1998.

Economic growth combined with currency controls and devaluations also have contributed, Garcia Banchs said. Venezuela relies largely on imported food, so the slipping value of its currency has pushed prices higher.

Food imports have more than doubled in the past decade, even though official figures show domestic food production has increased 44 percent in the past 12 years.

Venezuelan farmers say the weather in the past two years -- severe droughts followed by heavy rains -- has hurt the output of some products such as milk, beef, corn, rice, coffee and sugar.

But they also blame government price controls and seizures of farmland for causing a decline in investment.

Chavez has pledged to make sure the poor are adequately fed, and government inspectors have increasingly been dispatched to fine or temporarily shut down any private food sellers caught "speculating" or violating price controls.

Still, prices have jumped, and Venezuelans have had to cope with sporadic shortages of items such as milk, cooking oil, beef and sugar. When items disappear in stores, street vendors usually sell them at higher prices, ignoring the price controls.

Elver Ospino, 32, spends his weekends selling cartons of eggs on a sidewalk in Caracas to provide for his children because his other job at a toy store no longer brings in enough money. He acknowledges that he charges more than the official price allowed by the government.

"Everything's expensive," Ospino said. "The prices go up here almost every day, every week."

The rising prices are hitting especially hard in places like El Tigre, a rural town south of Caracas where barefooted children play among dirt-floored shacks.

El Tigre resident Jinest Martinez said she buys about 100 bolivars, or $23, of food for her three small children each week at a government-run Mercal market, using money from her husband, who works on-and-off in construction jobs.

"We're always missing soap, shampoo and things like that, but what's first is food for my children," she said.

Her neighbor Maria Irene Burgos, an unemployed 37-year-old who gets by picking wild tamarind fruit and with money she receives from one of her sons, said that before she signed up for a local government's food-handout program, "We sometimes went days without eating, and the children were begging for food" in the streets.

"I wish I could eat a plate of rice made well, with steak and onions, a salad and juice," she said wistfully.