Dollar exchange milk helps Venezuelan farmers deal with economic problems

By Deisy Buitrago

BARINAS, Venezuela (Reuters) – Farmers in the state of Barinas, one of Venezuela’s main agricultural regions, milk their flocks every morning before selling their milk for dollars, which is exacerbated by a lack of credit. economic crisis.

The Venezuelan agricultural industry has been affected by years of regulations and expropriation of land, in order to reduce the growth of livestock farmers and to switch to milk.

Livestock in the vast plains of Venezuela had 2.5 million head of cattle four years ago, but has dropped to 1.7 million as growth costs have risen, according to producers. Fewer cattle are being slaughtered because high inflation has affected demand for beef, they added.

Although the government of President Nicolas Maduro released business regulations in 2019, the measure has not made it possible to completely reactivate key areas for the affected economy of the South American country.

However, some farmers can now sell their milk for dollars, helping to offset the devaluation of the Venezuelan bolivar.

“It’s milk that allows us to have small boxes on the farm.

A liter of milk can be between 30 and 60 cents, Labrador said.

The use of the dollar has helped producers survive, they said, while attracting smuggled cattle to neighboring Colombia, Fedenaga said.

Beef production is much slower and takes more time to generate income in a country where annual consumption of 26 kilos per person has dropped to eight kilos per person in the 1990s, according to the Venezuelan National Federation of Livestock (Fedenaga).

Few farmers have been able to sell beef abroad, and the government has boosted exports to Asia and the Middle East.

Barinas’ milk production is about 2 million liters a day, according to producer estimates. Data on milk production before the Venezuelan crisis were not available.

Restrictions on new loans have limited the ability to invest on producers ’farms, with some resorting to abandonment of their land, while others focus on options such as producing corn or raising sheep or pigs with cows, Labrador said.

Livestock are facing government measures to control the availability of loans and to limit hyperinflation in spending on bolivars, as they have reduced the circulation of local currency.

According to the central bank, inflation in Venezuela will reach 686.4% in 2021.

A farm on the outskirts of the state capital of Barinas was producing about 14,000 liters of milk a day before the Venezuelan economic crisis, but now sees a production of 9,000 liters due to high production costs.

Only one of the farm’s milk systems is up and running after the lack of funding stopped the other, which was ready to add 8,000 gallons to daily production, Labrador said.

Attacks by criminal groups that burn farms, destroy equipment and kill livestock and damage nearby forests have also disrupted production, the producers added.

The gangs aim to evict farmers from their land before selling them to third parties, the producers told Reuters. Livestock and social media videos show that animals are abused, or confined to food until they die.