Sunday, May 20, 2007

“We’re heading toward socialism, and nothing and no one can prevent it,” said Venezuela’s strongman president, Hugo Chavez, in a televised address in January. Mr. Chavez had won re-election the month before after a campaign in which he promised to more aggressively advance socialism in Venezuela. Included in this push is what Mr. Chavez calls land reform: the redistribution of Venezuela’s arable land from large farms to cooperatives, often nothing more than squatter homesteads. The Chavez government encourages the practice by offering loans de facto grants, as they are regularly not repaid to co-ops. Mr. Chavez argues for land redistribution in his usual Marxist rhetoric of social equality and class struggle, but the Venezuelan government also hails the practice as an essential step toward agricultural self-sufficiency.

The irony, if history is any guide, is that this kind of land reform promises to make Venezuela even more dependent on imported food. Mr. Chavez’s brand of land reform is a proven failure, and in some cases, has led to disaster. One example that the Venezuelan leader is quite familiar with is Cuba, where the collective farming that Fidel Castro introduced proved ruinous.

Land redistribution has been ongoing since 2005, and the results are starting to emerge already. By some estimates, Venezuelan farmers produced 8 percent less food in 2006 than in 2005. Sugar cane production in particular is down, in one northwestern state by 40 percent. Landowners are trying to sell their property, knowing that if the land is taken over by one of the cooperatives financed by the Chavez government, they will not be compensated. Also for fear of losing their property, large landowners are no longer investing any more than they need to in their farms. Even if they wanted to, farmers who own more than 100 acres are categorically denied loans by Venezuela’s state banks, according to one farmer interviewed by the Wall Street Journal.

Last year, the Chavez government began “renegotiating” its contracts with foreign oil companies in order to hand a greater share of ownership in lucrative oil fields over to the state-controlled oil company, promising to kick out any firm that refused. This year he nationalized electrical and telecommunications companies, and promised to do the same to banks.

Mr. Chavez may think that oil revenue will buoy his social agenda, as it does his diplomatic one. Despite high oil prices, however, Mr. Chavez has done little to reduce poverty in Venezuela. Land redistribution will be yet another failed policy, and a reminder that Latin American’s retrograde Marxist left stubbornly refuses to learn from past mistakes.

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