Venezuela is a country in South America. It has been characterised by overreliance on petroleum exports. This has affected all the other sectors of the economy, as they receive less support from the government. One such sector is the agricultural sector. The country will be impacted greatly if no action is taken by the government to improve agriculture. Overreliance on petroleum exports has made the country extremely vulnerable to fluctuations in oil prices and global economic trends. Thus, the country enters into a recession whenever oil prices reduce. Agriculture is the smallest contributor to the country’s GDP, as it contributes only 4% of the country’s GDP (Rivas, 2002). Therefore, Venezuela relies heavily on foreigners for over two-thirds of its food supply. The US is one of the major suppliers of Venezuela’s agricultural products, accounting for a third of the total supply. This reliance has led to increasing food shortages in the country. Poor social and economic policies are the main contributors to the agricultural underdevelopment in Venezuela. If no solution is found, then the country will lack food supply to feed its population and cause further underdevelopment in the agricultural sector.
Agricultural problems in Venezuela
Agriculture has evolved into an environmental and natural resource crisis. Agriculture has been greatly underdeveloped in Venezuela, yet it is a country that has vital minerals and resources required for the global economy. The problem of food production can be traced to the Gomez regime, which lacked interest in agricultural development. Instead, Gomez wanted to expand petroleum revenues. Agricultural problems in Venezuela have persisted largely because of activities that have had detrimental effects on the environment. Environmental pollution has increased due to mining and oil exploration, which have affected agriculture adversely. The country has been keen on creating oil fields and mining land at the expense of land for agricultural production. Thus, only a quarter of the country is favourable for agricultural production (Rivas, 2002). The government is not involved in building public infrastructure due to the mismanagement of public resources, yet it would be beneficial for agricultural production. For instance, building roads, agricultural research institutes, and making agricultural inputs for farmers would boost agriculture. The government has also failed to make the economy dynamic.
The public is also uninterested in investing in agriculture. Few people are keen on agricultural production, as it is expensive and seen as unprofitable. Instead, many of the citizens are involved in manufacturing and mining activities. The country’s institutions have also been unable to establish an agricultural development model. This has impacted on the agricultural sector negatively, which has further prevented the public from being interested in investing in agriculture.
Agricultural services are also non-functional. People who are interested in agricultural production do not get the support they need to be established. This has led to calls for the government to have sustainable development. All the sectors of the economy should be developed together. Thus, natural resources should be used efficiently and avoid harming other sectors of the economy. The urgency in solving agricultural issues has created the new political will to deal with the problems that have been ignored as a result of political instability and financial difficulties. In the past, Venezuela did a devaluation of the currency to improve agricultural production (Rivas, 2002). Prices for agricultural produce and machinery were high. Therefore, devaluation of the currency was able to balance the economy, thereby encouraging more agricultural importers and lowering food prices, just enough to meet the local demand. This strategy can be employed today to improve agriculture.
The groups that are affected most by the underdeveloped agriculture in Venezuela are the common citizens and the poor within the society. The government has also tried to develop policies to prevent further problems, but no gains have been seen so far. Food prices are continuing to increase in the county. Venezuela also has among the highest levels of inflation in South America, especially due to fluctuating oil prices. For instance, inflation reached a peak of 37% in 1997 (Rivas, 2002). The high inflation has hurt agricultural development.
As earlier mentioned, the problem of insufficient agricultural production in Venezuela has been persistent because the country is overly relying on petroleum. Over 90% of Venezuela’s exports are based on oil (Rivas, 2002). The country was able to flourish and develop when the oil prices were high in the past. Unfortunately, few policies were established to develop other sectors of the economy during these times. Currently, it has been harder to achieve agricultural development without the financial resources the country had before. Thus, the persistent agricultural problems are a result of past failures by the country’s elites.
The solution to agricultural underdevelopment
There are several solutions that can be applied in solving the problem of agricultural underdevelopment, amidst the impending disasters and challenges affecting Venezuela due to agricultural underdevelopment. For instance, technology can be used to improve the substantiality of the various economic sectors and ensure that food production is efficient and less wasteful. Thus, mining policies should be established to reduce pollution and contribute directly to agricultural production. Conservation will be important, as it will result in financial savings. These savings can then be redirected into other sectors, like the agricultural sector. For instance, effective environmental conservation will make agricultural production cheaper while increasing productive land for food (Rivas, 2002).
The private sector can contribute to the agricultural sector immensely. Discussions should be encouraged between the government and agricultural stakeholders to find ways of dealing with the problem of agricultural underdevelopment and how to include the private sector. Venezuela enjoys greater political clout as a major oil exporter. This makes it easier to establish trade policies with other countries, especially with regard to agricultural imports. The elimination of fertilizer subsidiaries in the 1990-1991 biennium agreement had a negative effect on agriculture (Rivas, 2002). More subsidiaries should be implemented, thereby reducing the costs of supplying agricultural inputs.
Structural adjustments should also occur in the economy. First, the government should take more interest in other sectors of the economy to reduce the contribution of oil exports by a significant margin, while increasing the contribution of the other sectors of the economy. Rural development should also be encouraged. Only 34% of people in rural areas contribute to the labour force (Rivas, 2002). Therefore, the rest should be utilized in increasing agricultural production. People in rural areas should be taught about new technological advancements that facilitate increased agricultural production. Therefore, it is possible to increase agricultural output in Venezuela through education and agricultural extension services. The government can direct more finances towards agricultural improvement from the proceeds of oil export (Rivas, 2002).
Some of the reforms in agriculture should also incorporate land reforms. The production of a variety of foods should be encouraged. Initially, many of the policies in the agricultural sector relied on increasing the production of staple foods, such as rice, beans, and maize. These foods have low value and cannot improve the sector enough. Small scale farmers, who are mostly opposed to producing commercial foods, should be encouraged to increase the variety of foods produced. Experimentation and research should occur on new food strains that can do well in the environmental conditions of Venezuela (Rivas, 2002).
The process of land allocation for beneficiaries should also be less bureaucratic. In the 1970s, over 50% of the budget allocated for land reforms was used for administrative purposes (Rivas, 2002). This made the process of land allocation costly and time-consuming. The funds used to purchase land were insufficient, thereby discouraging many people from selling land for agricultural development. Therefore, the reforms should ensure that most costs in land allocation are in the actual growth of crops. More funds should be allocated to the agriculture sector to assist the farmers. This will increase production for the home market in the short term. With time, the excess production can be directed to exports, thereby increasing the contribution of agriculture to the country’s GDP.
Agriculture has remained underdeveloped in Venezuela for many years as a result of over-relying on other sectors of the economy, especially the oil sector. Petroleum production, the main export of the country, has been the main economic activity, accounting for over 90% of the exports. Reduction of global oil prices has affected the country negatively, especially in the efforts to revive the agricultural sector. The country relies heavily on food imports to feed its population. However, Venezuela can turn the situation around by implementing policies that will encourage agricultural production. It means that the government needs to increase support for the agricultural sector. Moreover, local food production should be increased to reduce the country’s dependence on food imports. Consequently, Venezuela will be able to deal with the problem of agricultural underdevelopment and become self-sufficient.
Rivas, D. (2002). Missionary capitalist: Nelson Rockefeller in Venezuela. Chapel Hill, NC: University of North Carolina Press.