Missteps as Venezuela's Hugo Chavez backs farming

By Frank Jack Daniel

MANTECAL, Venezuela (Reuters) - Deep in Venezuela's sweltering heartland, a gleaming dairy plant sits idle, a testament to missteps that slow President Hugo Chavez's drive to make his oil nation self-sufficient in food.

Dozens of workers in yellow rubber boots sluice water to keep metal pipes clean, ready to churn out pasteurized milk and cheese, but the site has barely operated since a team of Iranian technicians built it 10 months ago.

What may seem an obvious obstacle has yet to be overcome -- too few dairy cows are raised in the harsh plains where the plant is located to provide enough milk to keeping it running.

"It's like they put their pants on before their underwear," said Humberto Taquiva, a cobbler who is also an agricultural adviser in the tiny plains town of Mantecal, trying to persuade farmers to produce milk for the plant.

With world food prices at all-time highs and hurt by sporadic shortages of basic products last year, Chavez is determined to reduce Venezuela's dependence on costly imports and make its fields more productive.

"Some day Venezuela will export food," the leftist president said April 24 during a visit to a newly irrigated corn farm in the neighboring state of Barinas, where new tractors worked the land. "Output keeps on rising."

OIL EXPORTER, FOOD IMPORTER

Venezuela is a lush country but agriculture collapsed when oil crowded out coffee and cocoa farms in the 1920s.

The OPEC member is now one of Latin America's few net food importers. Oil wealth contributes to a strong currency, meaning imports are often cheaper than home produce.

There is little doubt Chavez is paying more attention to the countryside than any government in a generation. Harvests of many crops have risen steadily since he took office.

"It was totally abandoned," said peasant farmer leader Andres Tuesta. "This is a serious attempt to break with a model based only on oil and diversify the economy."

But cases like the empty plant in the tiny town of Mantecal show bad planning, along with an overvalued currency, have slowed Chavez's drive to make the fertile land produce more.

Food shortages are a tinderbox issue everywhere in the world, as unrest from Haiti to Senegal has shown in recent months. Anger at long lines for milk contributed to Chavez's defeat in a referendum on extending his powers last year.

Venezuela has promised to help other left-leaning governments in the region -- such as Bolivia, Nicaragua and Cuba -- to boost their production of grains, but it has run into difficulties at home.

Chavez, who says high food prices show capitalism is a failed system, has sheltered consumers from rising world food costs with subsidies and price controls.