Fighting drought, Venezuela takes over more farms

* 1,500 farms taken from landowners in eight years

* Fewer takeovers foreseen in 2010

* Irrigation a priority to tackle drought

By Frank Jack Daniel

HATO SAN JOSE, Venezuela, Dec 2 - Venezuela this year has taken over more than a million acres (485,000 hectares) of land deemed idle or of doubtful ownership as part of leftist President Hugo Chavez's bid to increase harvests during the worst drought in decades.

Agriculture Minister Elias Jaua said on Wednesday the drought meant yields for corn, a staple in the oil-exporting South American country, would fall about 40 percent from 2008, but the bigger area being cultivated would partly compensate for the shortfall.

Chavez's "21st Century" socialist project envisages a greater public sector role in farming and food production. Critics liken the government's food strategy to collective farming policies in the Soviet Union. They say price controls and land reform discourage investment and are to blame for a rise in imports.

Venezuela, one of the only net food importers in South America, is struggling to raise output to tackle high inflation and sporadic shortages of items like coffee and milk.

The drought has led to water and electricity rationing across the country and is a political headache for Chavez.

Under the policy, the government pays compensation to take land it considers idle or improperly used but occasionally seizes land if ownership is doubtful. Many of the farms taken over are later handed over to new owners such as cooperatives.

Chavez has nationalized much of Venezuela's industry including oil, telecommunications and electricity.

Speaking at Hato San Jose, a former sugar cane farm taken by the government in March, Jaua said land reform that began eight years ago had redistributed to small farmers or taken under government control 1,500 farms considered to be excessively large or underused estates.

"They say socialism is out of fashion, but here, large estates are out of fashion," he said, clutching two cobs of corn at the farm as a green combine harvester worked a field.

The government had also regularized ownership papers for millions of acres of land, he said, adding the government took 1.2 million acres (485,000 hectares) from landowners in 2009.

"This year was one of the most important for recovering land, in quality, not just in quantity."

In 2010, Jaua does not foresee as many takeovers. The priority will be tackling the drought with more irrigation and making the farms taken this year productive, he said.

'BIGGEST PROBLEM'

Until the oil industry took off in the 1920s, Venezuela was an important exporter of coffee and cocoa. The countryside has since withered, with most estate owners, rural laborers and peasant farmers leaving for the cities.

Hato San Jose is in one of Venezuela most fertile valleys, close to the capital, Caracas. The government took over a third of the land in the Aragua Valley this year, citing incomplete ownership documents and improper use of the land.

According to Venezuelan law, top quality land must be used for producing vegetables and beans, not for sugar cane, which is considered damaging to the soil.

The ministry is now digging wells and installing irrigation at Hato San Jose to overcome the drought, which is blamed on the El Nino weather pattern.

"The drought has been our biggest problem," said Otto Flores, the farm manager. "Once we get the irrigation working this month, we can start planting vegetables.

Jaua, who is one of Chavez's longest-serving ministers, said harvests were up 24 percent in Chavez's decade in office, but accepted output had not risen fast enough.

Consumption of meat, poultry and dairy products rose rapidly in recent years as high oil prices and Chavez's social spending raised incomes for the poor.

The lack of labor in the countryside meant Venezuela needs thousands of farm vehicles to raise output, Jaua said. Venezuela imports tractors from Iran, Belarus and Argentina. (Editing by Peter Cooney) ((frank.daniel@thomsonreuters.com; +58 212 277 2656; Reuters Messaging: frank.daniel.reuters.com@reuters.net))