Half-baked Socialism: A Glimpse Into Venezuela’s Bread Crisis

Panaderías in Venezuela aren’t just bakeries. They’re cultural institutions. They are canilla, francés, andino, campesino and a galaxy of sweet and savory pastry products that have become staples of the Venezuelan diet for decades. Just like you can’t picture Paris without the cafés, or a deli-free New York City, a Caracas without panaderías is an unthinkable image.

Unless you’re a chavista official, that is.

“During all these years we’ve never faced anything like what we’re facing now,” Nelly says, frustrated “it started when they declared businesses like panaderías ‘special contributors,’ meaning that now we have to pay double in taxes while facing shortages of milk, eggs, cheese and deli products. And if they arrive, you can only buy a bit of each.”

They have people to snoop around your business, pretty much telling you how to run it.

Nelly —which is not her real name— is about my age and she works at her family bakery, since it’s hard for her to find a job related to her college degree. Like so many others, her grandparents left Portugal to start over in a new country, opening a panadería almost four decades ago in a small city in Aragua’s heartland.

Despite all the hassles they have faced in the past few years, they’ve managed to keep their heads above water, until now.

Nelly’s family bakery is one of the 10,000 in Venezuela, according to Fevipan, the Venezuelan Bakers’ Federation. By March 14th, Fevipan reported 80% of bakeries in the country had no flour stock and the rest were getting by with 10% of their usual monthly amount.

Fevipan says that in that same month 120,000 tons of wheat should have been in the mills, another 120,000 tons in transit from abroad, and yet another 120,000 should already have been guaranteed from foreign traders in order to keep the cycle going. As you can see, saying things are less than perfect right now is an understatement.

“Then, two months ago, the government sent committees to every state, setting up meetings two or three times a week to discuss an agreement with all the bakery owners, which we could only accept.”

Then, the government came up with the  Plan 700, a chavismo initiative against the “economic war” that involves some 4,000 officers from the Armed Forces, the National Police, Sunagro (the national unit of agricultural and food management), the Sundde (the national unit of consumers’ rights protection) and the CLAPs, all working together overseeing the production and distribution of bread nationwide.

By March 14th 80% of bakeries in the country had no flour stock and the rest were getting by with 10% of their usual monthly amount.

“They have people to snoop around your business, pretty much telling you how to run it. People from SUNDDE make sure you are selling products at the right price, and also prevent queues from starting inside the stores. Almost impossible. As soon as anyone starts baking bread, people line up in the streets. There’s just no way to manage so many people!”

Other new rules imposed by the SUNDDE include that 90% of the flour from Cargill (the only authorized distributor) must be used to bake ordinary bread,  the rest allowed for pastries. Bakeries must also provide an ongoing bread supply from 7 a.m. to 7 p.m and ensure the next day’s supply by retaining bread from the previous day.

And that’s not the end of it.

“At the meeting, there were owners of very modest bakeries, places that are also restaurants or sell deli products as well, supermarket bakeries and even bread factories. And we were told the same rules applied to everyone: you got 100 sacks of flour meant to last for 10 days, regardless of the size of your business or how much you are used to make. Someone complained they would be done before noon.”

Each 45 kg sack was sold to bakers for Bs. 12,000, which Nelly admits is a pretty good deal for them since the same sack easily reached Bs. 200,000 on the black market. The two types of ordinary bread to be made with that 90% of the flour,  francés and canilla, have been respectively set at 45 g and 180 g, and at a price of Bs. 50 and Bs. 200.

If they used 100% of the flour in ordinary bread in order to fulfill the ten-sack-a-day quota, they would have to bake 1,000 loaves of francés or 250 of canillas, or a combination of the two, in order to make Bs. 50,000. That isn’t even enough to buy the ten sacks of flour they’re using!

At the end of the process, you have to give them back the empty sacks, they just want proof that you have used the flour.

And if they use only 90% in ordinary bread, that is to say 1,000 of francés or 225 of canillas for Bs. 45,000, then the rest should be sold for Bs 75,000. Now, those are some really expensive cachitos.

“They still expect you to keep the store running and pay employees’ salaries and labor benefits with that crazy math they do. And then, the cost of sugar, yeast or eggs products not subject to price control it simply doesn’t add up to the final price they want us to sell bread.

At the end of the process, you have to give them back the empty sacks, allegedly for something related to the environment. But the truth is that they just want proof that you have used the flour. It’s ludicrous. I can’t deny there were indeed some bakery owners doing shady businesses with the flour, but why do all of us have to pay?”

But for businesses like the one Nelly’s family runs, failure is not an option. Literally.

If you refuse to comply, then you’re blacklisted from Cargill. That means you can only buy flour in the black market. If you dare not to be careful, you might end up like Mansion’s Bakery, in  downtown Caracas, which was taken over on March 17th by a 90-day period and transformed into a “communal bakery.”

Reports on their success are contradictory. Either they don’t have flour to make bread or they make an average of 5,800 loaves of bread daily, well above the ten sacks quota. In fact, some report SUNDDE demands 3,500 pieces a day!

But for businesses like the one Nelly’s family runs, failure is not an option. Literally. In true Orwellian fashion, failure is illegal.

“Flour hasn’t come for several weeks, so now we’re pretty much like a bodega, selling coffee and cigarettes and some deli. And if you close the shop, they accuse you of ‘not using the space to produce for the people’ and then they might seize the business. It’s insane!”

She laughs, nervously, at the conundrum her family is forced to face. Then she sighs.

“Fortunately my grandparents are not to be alive to see this. My uncles keep hope that things might improve. They used to start at 4 am and work until midnight, now they start at 7 a.m. and usually close at around 5 p.m. This bakery is all they have.”

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