Venezuelan farmers boost rice and corn production with guild loans

More than 300 hectares (740 acres) of verdant corn and rice planted by Roberto Latini in the western Venezuelan state of Portuguesa undulate under a bright sun and blue sky.

The growing crops, set to be harvested in September, were planted thanks to funding for fertilisers and seeds from an agriculture guild, which has stepped in to support farmers in the economically beleaguered country.

Venezuelan growers of rice and corn, staple crops for domestic consumption, have reversed a years-long slump in production thanks to loans of fertilisers and seeds from buyers.

These loans are freeing up funds to invest in generators and other efforts to fight utility cuts, as reported by a dozen farmers.

The loans, from at least six guilds in Portuguesa and 20 crop-buying groups nationally, come amid tight credit restrictions, making traditional bank loans nearly impossible to secure, with inflation over 50%.

Production rises but challenges persist

Agricultural production in Venezuela, which largely relies on national food output, has plummeted in the last decade due to years of price and currency controls, land nationalisations, lack of fuel, and failures in public utilities.

President Nicolas Maduro loosened currency restrictions in 2019, allowing transactions in dollars and giving the economy some breathing room. He has also employed an orthodox effort to reduce inflation with credit restrictions and lower spending.

Bank loans available to farmers in Venezuela total about $330 million (£252.44 million), according to local consulting firm Globalscope.

Much of that funding goes to producers of small-scale export crops like sesame and mung beans.

In comparison, credit availability is between nine and 12 times that figure in Bolivia and Colombia.

Though “forward selling” of crops is common in other Latin American countries like Brazil, the practice is new and growing in Venezuela, local agricultural experts said.

The terms of the loans, often paid back with the harvest itself, can still be prohibitive for some small growers.

Without more regular financing from banks, challenges will persist, and some producers could shut their operations.

Guilds and associations aid farmers

Output of rice and white corn was up to 1.2 million metric tonnes last year, 29% more than in 2022.

This boost is still far below production levels of 3.4 million tonnes a decade ago, according to agriculture guild figures.

Giorgio Ruffato, a grower of rice and corn in Portuguesa, represents one association helping fund farmers.

“We give them seeds, insecticides, help with machinery repairs, and services to store their harvest,” he said at his farm, which includes a small laboratory to check for crop damage from pests or fungi.

Producers pay back loans by handing over their harvest or earnings from selling to processing plants, who pay them for crops in dollars based on international prices.

Some small producers still do not earn enough to pay back the guilds. Higher costs for producers, coupled with 12-month inflation of 51.3%, could trickle down to consumers.

Farmers adapt to challenging conditions

Some farmers are making large investments in roads and back-up power sources due to poor infrastructure and frequent cuts to water and electricity.

Latini uses transformers on his land to keep watering systems for rice plants working even with power cuts, while Ruffato has repaired some local roads to transport crops.

Despite the significant efforts, without more substantial financial support and consistent infrastructure improvements, the long-term viability of Venezuela’s agricultural sector remains uncertain.