As long as the legal reserve ratio remains high and the credit book low, it will be difficult to boost agricultural activity. Consumer credit would improve the purchasing power of Venezuelans, boosting the flow of sales for producers, consequently increasing the supply to meet this growing demand.
The president of the Confederation of Associations of Agricultural Producers (Fedeagro), Celso Fantinelcelebrates a slight recovery in the sector, but predicts that by 2023 it will not be possible to maintain itself without credit activity so that producers increase their production.
For the union representative, sustaining the levels of 2022 would already be good news, since there was a good harvest. But, many worked at a loss due to poor marketing, since consumption in Venezuela is very low due to the purchasing power of the population.
“We had good harvests, but poor marketing in the case of white corn, yellow corn and rice. We have kept prices below our production costs, which will reduce the productive capacity of producers”, he highlighted.
This deficiency highlights the need to reactivate credit activity, a call that companies and producers have made over the last two years. Not only productive loans, but even consumer loans, with the rehabilitation of credit cards, to add greater purchasing power for Venezuelans.
Boosting sales would lay the foundations for the progressive growth of production.
Fantinel assures that this request has been heard by the Government, which in recent months has met with the agricultural sector. The concrete actions, however, are still not appreciated.
“The government listens. From the Minister of Agriculture (Wilmar Castro Soteldo) and the Vice President (Delcy Rodríguez) with the Ministry of Finance, the Ministers and Vice Ministers of Food and Commerce; but there is a problem of consumption, the Venezuelan does not eat well since he does not have a good salary, “he confessed in statements collected by Union Radio.
In recent months, the government has tried to slightly boost credit by announcing financing initiatives for producers and allowing the reactivation of credit cards for a handful of clients in some banking entities.
Despite these efforts and a slight increase in the loan portfolio in 2022, credit capacity falls short of the country’s needs. In fact, banks reached their lowest level of financial intermediation, that is, they have the lowest capacity to lend money in their history.
*Read also: Venezuelan banks reach the lowest level of their capacity to grant credits
Meanwhile, the banking legal reserve, which forces banks to freeze a part of the money they receive from deposits from their clients, remains at 73%.
Despite requests to the Government for this index to decrease and promises from the Executive that it would drop progressively, there have been no changes in the percentage since February.
Agricultural activity improved in 2022
According to the balance of the closing of the Fedeagro harvest, the production of the main agricultural items in the country increased during 2022, generating a positive balance with respect to the previous years of decline.
Fantinel declared to EFE that rice production in Venezuela increased this year by 118% compared to 2021, while the production of this cereal closed the period at 525,000 tons, when in 2021 it reached 240,000 tons.
Thus, the production exceeded the initial expectations of the sector, which expected to end the season with a harvest of 400,000 tons of rice.
In 2019, with a production of 238,650 tons, the fall that had been recorded since 2014 stopped, when 1.15 million tons were produced.
In general terms, Fantinel assured that 2022 was a “very good” year for agriculture, with a recovery in the area planted to food such as corn and rice.
Likewise, it foresees that growth will continue in 2023, which will “mean more jobs that are so needed” in rural areas with agricultural activities.
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