Venezuela AGRICULTURE
Unavailable
Figure 5. Estimated Gross Domestic Product (GDP) by Sector, 1988
Unloading harvested corn
Courtesy Inter-American Development Bank
Agriculture played a smaller role in the Venezuelan
economy
than in virtually any other Latin American country in the
1980s.
In 1988 the sector contributed only 5.9 percent of GDP,
employed
13 percent of the labor force, and furnished barely 1
percent of
total exports
(see
fig. 5). Agricultural output was
focused
almost entirely on the domestic market.
The backbone of the national economy for centuries,
agriculture entered a period of steady decline in the
early
twentieth century as the oil industry eclipsed all other
sectors
of the economy. As late as the 1930s, agriculture still
provided
22 percent of GDP and occupied 60 percent of the labor
force. The
industrial development of the nation by the 1940s,
however,
seemed to have relegated agriculture to permanent
secondary
status.
Agriculture recorded its worst growth in years in the
early
1980s, and the decade saw successive programs designed to
revive
agriculture in the face of a weakened economy. Government
policies toward the sector often alternated between
deregulation
and extensive government intervention, with the latter
being the
more typical response. In 1984 the Lusinchi administration
confronted rural stagnation with a multifaceted program of
producer and consumer subsidies, import protection, and
exchange
rate preferences. The plan also reduced interests rates on
agricultural loans through scores of government
development
finance institutions serving the sector. Government
decrees also
required commercial banks to hold at least 22.5 percent of
their
loan portfolios in agriculture. Farmers were exempt from
income
taxes. These measures paid off handsomely in the short
run.
During one five-year period of expansion, for example,
annual
growth rates in the agricultural sector reached 8 percent
in 1984
and 1985. The government's program to resuscitate the
rural
economy, however, was extremely costly because it entailed
high
levels of subsidization.
The Ministry of Agriculture and Livestock (Ministerio
de
Agricultura y Cría--MAC) designed and implemented the
nation's
agriculture policy. The most drastic changes in farm
policy in
1990 occurred through the devaluation of the bolívar,
which
automatically eliminated previous preferential rates for
certain
agricultural inputs. Likewise, the Pérez government's
policy of
price deregulation affected many basic agricultural
commodities,
and ensuing price rises were a factor in the February 1989
riots.
As a result of government cutbacks in subsidies and price
supports, agriculture registered a 5 percent decline in
1989.
Data as of December 1990
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