The Oil Price-Conuco Nexus

Have you ever noticed how the government's infatuation with "urban agriculture" always seems to flare up when oil revenues collapse?

Lorena Freitez, Minister for Urban Agriculture, recently explained the four pillars to develop her field –pun intended: activation of 1,000 productive CLAPS; “supporting” the production of animal proteins; Hagamos una vaca or ‘we must all chip in’; and last, but not least, conucos in schools.


It’s easy to forget that all the way back in 2004 Chávez’s infamous millardito was supposed to be used for agricultural projects.

Carlos Machado-Allison saw it all coming way back in 2003. “When the bitter winds of economic and political crisis blow,” he wrote then “the agricultural and agro-industrial sectors come out of oblivion because the last thing a human being stops doing, even burdened by unemployment and inflation, is eating”.

Machado-Allison is on to something. This isn’t the first time this has happened. Actually, I think it’s something of a law: the government’s interest in agriculture —especially urban agriculte— is inversely proportional to the price of oil.

It’s easy to forget that all the way back in 2004 Chávez’s infamous millardito was supposed to be used for agricultural projects. (Oil was at $40 a barrel.)

See? When the economy, or — who are we kidding — oil prices are doing well, then the government expropriates countless acres of land, Agroisleña (the big agro-inputs company), and every sort of agri-food enterprises, while at the same time importing a whole lot of food. Then, when prices tank, the supply side goes into a tailspin, local production starts dropping by the hour –including all of the expropriated lands and factories- and there are not enough dollars to fill the gap with imports, the government tells us we have to grow our own produce at home.


In February 2002, as political tensions rose, Chávez proposed filling Venezuela with gallineros verticals and the cities with micro hydroponic huertos.

This year oil has been notoriously in the toilet, so it’s no surprise we’re deluged with with announcements and Cadenas Nacionales about homespun agriculture, including that strange Resolution #9855 that seemed to hold out the prospect of mandatory field labour and Maduro’s proposal to lower banks’ legal reserve requirements to invest in urban agriculture funds.

But go back even farther and the pattern is clear. In February 2002, as political tensions rose, Chávez proposed filling Venezuela with gallineros verticals and the cities with micro hydroponic huertos. In March 2009, at the beginning of a two year recession due to low oil prices, Chávez proposed home crops. Now, the government revives the whole conucos caseros strategy and then we get the cherry on top: a whole Ministry dedicated exclusively to urban agriculture.

Venezuela’s agriculture is hyper regulated and was the first victim of major governmental interventions starting as far back as 2001. Again, it’s easy to forget but the first major bit of expropriation-themed legislation in the Chávez era was the infamous 2001 Ley de Tierras — approved via Enabling Powers with no parliamentary debate. It was followed by viciously discriminatory treatment on the allocation of credit to choke out farmers seen as enemies of the revolution. By March 2014, agricultural producers had to meet between 32 and 34 different sets of regulations and laws.


Now, some desubicada minister tells us if we want hallacas we better start planting our own ají dulce.

Real investment withered. Expropriated farms hardly produced anything. It was all maddeningly foreseeable and foreseen. The curse of Cassandra.

Now, some desubicada minister tells us if we want hallacas we better start planting our own ají dulce. Maduro activates an Urban Agriculture Plan and promised it would deliver enough produce to make hallacas for  400,000 families.

FFS.