The Economic Crisis in Venezuela and Urban Agricultural Solutions to their Economy
Venezuela had consistently suffered a high economic crisis for a very long time, and still, Economic Crisis in Venezuela persists up till today. According to Noris Soto (2015), their economy had been forecasted to shrink about 9.1% in 2015 and also 16.5% between 2014 and 2016. Venezuela, one of the prominent countries in Latin America still suffers the deepest economic crisis in its history with the stated output. It is, however, difficult to understand the reason why the government is not reacting to this lingering reality, and also why it had refused to take measures to alleviate the distortions in the economy that keep destroying the major income of Venezuelans. (Soto, 2015)
Updates on the media had shown that the present president, Nicolas Maduro is expected to finish his term in late 2018, and the global oil prices and other economic crisis, extraordinary deepens in the economy, thus producing serious shortages and improving the potential risks of hyperinflation. More projections had arisen where their possible deep recession will rise in 2016 where imports and other activities will drop sharply. (“The Economist Group”)
The prices of oil continue to increase simultaneously and there seems to be no changes. According to “Focus Economy,” the average price of mix of crude oil had dropped to 0.3% over the previous months and had remained largely unchanged, stagnantly at $24.3 per barrel tallied in January, 2016. As a result, oil prices in February, 2016 fell to another all-time low. Another report on March 14, 2016 from the Organization of Petroleum Exporting Council (OPEC) had proven that Venezuelan oil production had increased from 2.32 million barrels daily (mbpd) in January to about 2.33 mbdp in February, and this didn’t affect the economy positively.
Apparently, the Venezuelan government totally relies strongly on oil revenues in order to balance its budget and also perform its international obligations. The account of oil in Venezuela’s exports and over a half of the public sector revenues is about 95%. This plunge in oil price puts additional pressure on Venezuela’s finance as $8.3 billion of debt are due for payment this year alone.
Thus, in order to meet up with this repayment and sort out their financial crises, the president, Nicola Maduro had announced new measures to mend the dying economy. The president started by replacing the Vice President for the Economy, and then released a new set of economic data. Additionally, while describing the economic situation as critical, the economy keeps suffering inflation, which had reached about 180.9% in December, 2015. Sources also had it that the president had raised the prices of gasoline to about 6,000% for the first time since 1997, just in the quest to stabilize the economy.
Consequently, the rise in inflation has placed a large effect on food consumption and distribution in the country. According to Daisy Luther, Venezuela is short of food and it does not have food sufficient enough to feed its population. Thus, keeping the women and children in serious hunger. The supermarkets are filled with empty shelves and more shocking events continues to unfold. This then led to the government resolving to the fact that they have to begin to produce their own food this January, 2016. (Luther, 2016)
The economic crisis in Venezuela had required the need to observe the value of sustainable agriculture. Venezuela’s economy does not depend on food system for the economic growth of the country. According to Dave Schwerin, the recent works towards the development of a sustainable food system in Venezuela tries to provide a lens through which can be used to analyze broad features of the revolution for the purpose of transforming the Venezuelan society at large.
Therefore, the type of urban agriculture interventions that should be proposed to the Venezuelan society are the commercial farms and community gardens.
The success of the economy of a nation cannot totally rely on a particular source, but when there are other commercial sources of income, the economy will be stabilized to an extent. Commercial farming in urban agriculture is a factor that can reshape the economy of a community, as well as a nation. Popularizing large-scale urban agriculture by unleashing a conceptual model for farming in communities in Venezuela will encourage families and to produce bounties of food that can be shipped to other states and possibly other countries. Additionally, encouraging community garden in most of the developed communities will help increase a sense of ownership and stewardship of people in that community, it would bring people together from different background with one purpose to live a sustainable life without total dependence on the government.
Finally, there are many other operations that can benefit the Venezuelan society, such as food process, food marketing, and food retailing. These sectors will help diversify the economy, provide job opportunities, and also help increase revenue and conversion. Additionally, Farmer Groups should be constructed to help people get involved in commercial farm and community garden. They should also be equipped and provided with suitable training and inputs (seeds, tools, and fertilizer).
This proposal is targeted at the urban community citizens and farmers who find agriculture a passion and chooses to engage in community gardening.
- Luther, D. (2016). Venezuela Is Out of Food: Here’s What an Economic Collapse Really Looks Like. Retrieved March 25, 2016, from https://www.activistpost.com/2016/02/venezuela-is-out-of-food-heres-what-an-economic-collapse-really-looks-like.html
- Schwerin, D. (n.d.). Dave Schwerin, “Agriculture in Venezuela: Hopes for a … Retrieved March 24, 2016, from https://www2.dickinson.edu/departments/commstud/PDF_files/studentpapers/venezuela07/daveschwerin.pdf
- Soto, N. (2015). Venezuela Economic Crisis to Only Get Worse, Barclays Says. Retrieved March 24, 2016, from https://www.bloomberg.com/news/articles/2015-09-25/venezuela-economic-crisis-to-only-get-worse-barclays-says
- Venezuela Commodities January 2016. (2016, February). Retrieved March 24, 2016, from https://www.focus-economics.com/countries/venezuela/news/commodities/venezuelan-oil-prices-plunge-to-a-new-all-time-low-in-january
- Venezuela Economy – GDP, Inflation, CPI and Interest Rate. (2016). Retrieved March 24, 2016, from https://www.focus-economics.com/countries/venezuela
- Venezuela. (2016). Retrieved March 24, 2016, from https://country.eiu.com/venezuela