MercoPress. South Atlantic News Agency

Venezuela's Chavez sends soldiers to take over rice mills

Venezuelan President Hugo Chavez sent troops on Saturday to temporarily take over rice processing plants. Chavez accused some firms of overcharging by refusing to produce rice at prices set by the government and warned some companies could be nationalised if they tried to interfere with supplies of the grain.

"I have ordered the immediate intervention in all those sectors of agro-industry, intervention by the revolutionary government" Chavez said during a speech to commemorate deadly riots over high prices in Venezuela 20 years ago. Government officials entered a mill owned by Venezuela's top food company, Grupo Polar which belongs to US Cargill, on Saturday afternoon and said they would increase its output overnight. Earlier this month, Chavez won a referendum vote on allowing him to stay in office as long as he wins elections. The populist president, who has already governed for a decade, often radicalizes his policies after electoral victories and has nationalized large swaths of the Venezuelan economy in recent years. Last year, Venezuela seized control of plants and offices belonging to Mexican cement giant Cemex. In 2007, the government said it had taken control of the massive Orinoco Belt oil projects as part of President Chavez's nationalisation drive. Venezuela's rice millers association said its members were producing what they could with available stocks of the grain and had not been formally notified of Chavez's order. "I will expropriate them. I have no problem with that and I'll pay them with bonds. Don't count on me paying with hard cash," he said. "This government is here to protect the people, not the bourgeoisie or the rich". In the past, Chavez has paid reasonable compensation for takeovers, but falling oil prices limit his ability to pay for such moves. The government imposes price controls on basic products and frequently accuses private companies of hoarding food. Venezuela grows enough rice for domestic consumption and exports a small amount. In Venezuela, the government provides basic foodstuffs at low prices in state-run markets known as "mercales". But many rice, wheat, meat and dairy producers complain that the price regulations leave them without a profit and that many are facing bankruptcy, our correspondent says. The country's inflation levels are the highest in Latin America and, as a result, there are often shortages of items such as rice and coffee, leading to hoarding and sale on the black market.