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R 111622Z FEB 10
FM AMEMBASSY CARACAS
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RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
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C O N F I D E N T I A L SECTION 01 OF 04 CARACAS 000167 
 
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E.O. 12958: DECL: 2030/02/10 
TAGS: PGOV PREL KDEM EAGR VE
SUBJECT: View from the Countryside: The Government Is Taking Over 
 
REF: 10 CARACAS 27; 09 CARACAS 1374; 09 CARACAS 1019; 10 CARACAS 95 
 
CLASSIFIED BY: Robin D. Meyer, Political Counselor, DOS, POL; REASON: 
1.4(B), (D) 
 
¶1.  (C) Summary: Government control is wide and deep in the 
agricultural state of Yaracuy, located in the northwest part of 
Venezuela.  Business leaders described constant attacks on the 
private sector through land invasions and expropriations, 
subsidized agricultural imports, and government indifference to 
high rates of targeted kidnapping.  Members of the media maintain a 
"careful balance" so as to avoid government closures.  Opposition 
leaders meet weekly in the regional Unity Table (Mesa de Unidad), 
and blame their internal divisions for the United Socialist Party 
of Venezuela (PSUV) sweep of the 2008 municipal and state 
elections.  This year, unified, the opposition hopes to win a four 
of the five National Assembly seats up for election in September. 
 
 
 
 
Background 
 
 
 
¶2.  (SBU) This cable draws on meetings conducted by Emboffs in 
Yaracuy from January 26-27, 2010.   With an estimated population of 
600,000, Yaracuy is an agricultural state wedged between the much 
larger economic centers of Valencia and Barquisimeto.  The state 
produces sugar cane, palm oil, corn, and oranges, and also includes 
cattle ranches.  In the 2008 regional elections, the PSUV won 
mayoralties in 14 municipalities, six of seven state assembly 
members, and the governorship.  The PSUV Governor of Yaracuy is 
Jose Leon Heredia, widely described as "chavista light" and a 
pragmatic businessman who is seen as  much better at governing than 
previous PSUV Governor Carolos Jimenaz, who is currently under 
investigation for corruption. 
 
 
 
The Government Is Taking Over 
 
 
 
¶3.  (C) "The government is deliberately strangling the private 
sector," said cattle farmer and land owner Jose Luis Zerpa 
(protect) on January 26.  Zerpa and other farmers characterized 
government intentions as "malicious," targeted at dismantling the 
private sector, because,  as the head of the Yaracuy Chamber of 
Commerce Fhandor Quiroga (protect) said, "the private sector is a 
pillar of democracy."  Businessmen described a three-pronged 
strategy of the Venezuelan government (GBRV): taking land, 
subsidizing imports, and allowing free reign to kidnappers. 
 
 
 
Taking Land: 
 
(C)  The government has both expropriated land from farmers to give 
to "socialist cooperatives" and has tacitly supported impromptu 
land invasions by individuals.  When land is expropriated or 
invaded, cattle farmer Beatriz Guzman de Diaz (protect) said the 
land often becomes unused as people do not have the resources or 
experience to farm it.  "Sometimes," she noted, "the land invaders 
then work for neighboring farms that are still under private 
ownership." Quiroga noted that the government initiative to 
establish 17,000 cooperatives on expropriated land several years 
ago failed and "just 100  cooperatives are still functioning.   In 
addition, as the GBRV has taken control of many aspects of the 
national food distribution system, farmers must sell to the 
government, which Zerpa said is often late in paying for products. 
 
 
 
 
Subsidizing Food Imports: 
 
CARACAS 00000167  002 OF 004 
 
 
(C) The government subsidizes food imports by providing dollars at 
the official exchange rate of 2.6 Bolivares Fuertes per U.S. Dollar 
(previously 2.15 Bolivares per USD until the devaluation in January 
described in ref A).  Farmers are unable to import supplies or 
equipment at this rate and must use the parallel market of about 5 
Bolivares Fuertes to the U.S. Dollar.  Diaz said this policy of 
subsidizing imported agricultural products "has destroyed what was 
once a great business." 
 
 
 
                Targeted Crime: 
 
                (C) Yaracuy has suffered from a sharp increase in 
targeted kidnappings of businessmen.  Quiroga said Yaracuy had the 
highest per capita rate of kidnapping in the country, with 58 per 
1000 inhabitants in 2009.  State Assembly Deputy Francisco Ferrer 
said both kidnappings and extortion were major problems in Yaracuy, 
and the total ransom paid in 2009 was greater than the municipality 
budget for the state capital of San Felipe.  "In one way or 
another, the kidnappings are linked to the government."  He claimed 
that businessmen who complain to the government find themselves 
more likely to be kidnapped than those who quietly pay extortion 
fees.  Ferrer is the only opposition member of the seven-person 
State Assembly, and his PSUV colleagues have told him that "crime 
is only a problem for the rich."  Quiroga said the risk of 
kidnapping has made it difficult to recruit businessmen to be 
active in the opposition because "no one wants his face in the 
newspaper." 
 
 
 
Agricultural Production is Down 
 
 
 
¶4.  (C) As a result of the government's strategy, business leaders 
said agricultural production has dropped considerably in Yaracuy. 
According to Quiroga, sugar cane production has dropped by two 
thirds in the last decade.  Where there used to be five sugar 
plants in Yaracuy, now there are none, with farmers using one in 
neighboring Lara State that is also on the edge of bankruptcy. 
With the risk of land invasions, Diaz said that many cattle and 
sugar cane farmers have decided to shift to growing oranges.  "That 
way," she said, "it is harder to invade the land because there are 
trees in the way."  Zerpa also mentioned this strategy, noting that 
it takes 4 to 5 years for orange trees to produce, "but we have 
time and it's worth it if we can keep our land."  He said Yaracuy 
has not made the transition to capital-intensive and 
technologically driven farming, and outdated methods are the norm. 
In that sense, farming in Yaracuy uses more labor and is less 
productive than farming in many other countries.  Even so, it is 
difficult to find manual labor, and Zerpa pointed to the 
proliferation of the government's social projects (the Misiones) as 
one important reason.  "People prefer to receive stipends for 
participation in these Misiones than to work," he claimed. 
 
 
 
Money for "Misiones" But Not For Infrastructure 
 
 
 
¶5.  (C) The Venezuelan government has established "social missions" 
throughout the state, including the health clinics of Barrio 
Adentro, the literacy classes of Mision Robinson, and subsidized 
food through the Mercals.  With the private sector struggling, 
non-government charities have fewer donors and limited resources. 
The Yaracuy director of Catholic charity Caritas, Nancy Meza de 
Guevara (protect), said the GBRV closed a clinic sponsored by 
Caritas a few years ago because "it interfered with the Barrio 
Adentro clinic next door." Caritas also has very little money, 
relying on volunteers to run training workshops and other programs. 
She said that some misiones were good, and others were simply cash 
transfers to participants; mision participants and their families 
are also ordered to attend political rallies.  "These aren't 
programs to help people develop skills," she said, "they just keep 
 
CARACAS 00000167  003 OF 004 
 
 
the poor in poverty." Bishop of San Felipe Nelson Martinez 
(protect) agreed that the misiones do not work, but emphasized that 
between the misiones and the public sector the government has 
become the primary source of income for people in Yaracuy.  "If 
you're not with the government you don't eat," said Martinez. 
 
 
 
¶6.  (C) While there has been heavy investment in the misiones, the 
state has suffered from water shortages for months.   Secretary of 
the Unity Table Antonio Durich (protect) said there had been no 
infrastructure investment since Chavez had come to power. The 
public health system has also deteriorated.  Medical doctor Alcides 
Inojosa (protect) said the public hospital in San Felipe was in a 
state of collapse, and that preventive medical care has been 
abandoned.  He dismissed the Barrio Adentro program as a political 
project with unqualified medical personnel, reflecting criticism 
throughout Venezuela (ref B), and said there was a widespread 
shortage of doctors in the health system due to low wages and 
dangerous work environments.  He noted, however, that "people still 
like getting free things," and so the misiones remain popular.  The 
bishop of San Felipe said Chavez uses these projects to consolidate 
support and to warn that "if the opposition wins they'll end the 
misiones." 
 
 
 
Freedom of Expression Under Pressure 
 
 
 
¶7.  (C) Journalist and Copei political party member Hector Duque 
(protect) said there was "more or less" freedom of expression in 
Yaracuy, but "there was a lot of fear" among members of the press. 
There are three daily newspapers in Yaracuy, five cable television 
stations, 8 private radio stations and 41 "community" radio 
stations.  Director General of Radio Yaracuy Pablo Ramon (protect) 
said the closure of 32 radio stations last year (ref C) was a 
"shock of cold water" to his station.  One of the oldest stations 
in the country, Radio Yaracuy has since followed a strategy of 
maintaining "a careful balance" in order to stay on the air.  The 
station still regularly airs calls from listeners complaining about 
pot-holes or trash build up, but they have also signed an agreement 
with the PSUV governor to cover his press conferences.  Ramon said 
they avoided taking government advertisements since they do  not 
want to be beholden to the government, but they did self-censure 
because "surviving is important for the future."  The manager of 
the daily newspaper El Diaro de Yaracuy said his paper always 
"showed both sides" because that is what market research has 
determined is most profitable.  The bishop of San Felipe said there 
is freedom of expression in Yaracuy and he regularly denounces the 
government to his priests.  He noted that his reach was limited; 
while almost everyone identifies themselves as Catholic, only about 
7% of the population attends church. 
 
 
 
Opposition Optimistic but Chavez Still Popular 
 
 
 
¶8. (C)  The members of the Unity Table described their losses in 
the 2008 elections as being a result of divisions among the 
oppositions.  Now the Unity Table meets weekly, and Rafael Parra 
(protect), a former Convergencia mayor in Yaracuy, thinks the 
opposition can win up to four of the five Yaracuy seats in the 
National Assembly elections in September.  (Note: Yaracuy's 
districts were not changed by the GBRV's redistricting described in 
ref D. End Note.)  The Unity Table is following the national 
organization's lead in selecting candidates by consensus in 
February, and if no agreement is reached, then holding elections in 
March.  His optimism is not shared by everyone.  Secretary of the 
Unity Table Durich thinks that if elections were held today, the 
PSUV would win almost all the seats.  Durich also lamented that 
national media  and business organizations were not helping the 
opposition in Yaracuy.  Radio Yaracuy Director Ramon said people 
think "Chavez is not responsible for all of these problems, he is 
 
CARACAS 00000167  004 OF 004 
 
 
the hope."  He also noted that people just don't believe the old 
parties have changed;  any real challenge to Chavez will not come 
from the opposition, but from people who are currently working with 
Chavistas.  Many people do not hold the PSUV responsible for the 
deterioration of public services, and some profess to believe 
explanations that do not appear to make sense.  El Diario de 
Yaracuy manager Jonathon Leon (protect) said, for instance, that 
there were water shortages in Yaracuy because it was raining so 
much.  "I didn't think it made sense at first either," he said, 
"but when it rains more there is less water." 
 
 
 
Comment: Chavez's Power Has Grown In Spite of Failing Services, 
Opposition Remains Weak 
 
 
 
¶9.  (C) Chavez's stronghold is in rural areas like Yaracuy.  Since 
coming to power, PSUV leaders have worked to dismantle the economic 
base of the state's private sector, thereby further weakening the 
opposition.  They have increased government control over 
employment, social services and the media.  Business leaders showed 
a palpable level of concern about their livelihoods, personal 
security, and the future of Venezuelan democracy.  The 
deterioration of basic public services does not seem to have 
triggered opposition to Chavez.  The opposition faces the challenge 
of both running against a powerful, well-funded government and 
developing a credible platform that appeals to a majority of the 
electorate, including those such as one of Diaz's farmhands, who 
believe that  "now," with Chavez, "we matter, and we are taken into 
consideration." 
DUDDY