Aletho News

An Englishman in Venezuela

By Paul Dobson | Morning Star | June 10, 2012

World Bank president Robert Zoellick said last week that the days of Venezuelan President Hugo Chavez were “numbered” economically and politically following a wave of nationalisations.

Zoellick spoke ominously of “an opportunity to make the western hemisphere the first democratic hemisphere” by exploiting Chavez’s hypothetical downfall to force “rapid policy changes” on other countries, naming Cuba and Nicaragua.

Without a trace of irony he talked of how the US could make Latin America “a place of democracy, development and dignity” rather than one of “coups, caudillos and cocaine.”

A bit rich from the country which organised the coups, bankrolled the caudillos and bought the cocaine for decades before the progressive movement spearheaded by Venezuela’s Bolivarian revolution began to reshape the continent.

But Zoellick may be underestimating his target. The Bolivarian revolution has made tremendous gains for Venezuela’s democracy, development and dignity precisely by challenging the might of exploitative transnational companies. Here we can look at just one example – Venezuela v a British man nicknamed “Spam.”

Or to give him his full title, Samuel George Armstrong Vestey, third baron Vestey, lieutenant in the Scots Guards, peer, ex-chancellor and lord prior to the Order of St John of Jerusalem, deputy lieutenant of Gloucestershire, Master of the Horse of the Sovereign, Knight Commander of the Royal Victorian Order.

He’s 27th in the Order of Preference for Gentlemen in the UK – a who’s who of the nobility – the ex-husband to Prince Harry’s godmother and owner of the 2,430-hectare Stowell Park estate in Gloucestershire. More importantly he’s the head of Vestey Group.

The group is a British foodstuff conglomerate founded in Liverpool in 1897, which made its fortune importing meat. It moved into Venezuela in 1903 and bought 11 ranches in prime-quality land (classified in the country as “A1,” the best possible for farming), setting up the Compania Inglesa subsidiary in the country which itself set up Agroflora, the cattle-ranching arm of the business.

The company did well, buying up land in a range of other countries from Australia to China and making vast profits for its owners William and Edmund Vestey. William managed to get ennobled as a baron despite opposition from King George V, who was irritated by his demand for tax-exempt status at the height of World War I.

When this demand was refused they went into tax exile in Argentina before setting up a dodgy if legal scheme involving a French trust fund that enabled them to evade almost all tax in Britain until the loophole was closed in 1991. A Sunday Times investigation once revealed that in 1978 the firm had managed to pay just £10 in tax on a profit of around £2.3 million.

They were at their height called “the richest dynasty in the land apart from the Windsors.” Biographer Philip Knightley wrote: “They did not live on the income, they did not live on the interest from their investments. They lived on the interest on the interest.”

Business and tax evasion went excellently for William’s successors until 2001, when the Chavez government passed a new land law allowing it to look into all landholdings of over 5,000 hectares and forcibly nationalise them with compensation if they were deemed inactive, idle or no project was presented for their development.

Spam had a problem – he owned over 420,000ha of land in Venezuela and over 130,000 head of cattle. Twelve of his ranches surpassed the 5,000ha mark. So he held a one-man protest outside Venezuela’s London embassy in February 2001.

Squatters began to settle on his lands and cultivate crops. Though they were making use of previously inactive land, there are reports of these landless farmers being shot at and even murdered by men allegedly paid off by Spam.

In 2005 things got even worse for the tycoon. The government sent troops into his Charcote ranch and confiscated 13,000 cattle. After coming to an agreement with the government Spam received the equivalent of £2.65m in local currency as compensation for two ranches he was forced to give up.

In 2008 there was controversy over the plight of 400 indigenous people who lived on his Morichito ranch. By the terms of the land contract they were literally owned by Spam.

In October 2010 he faced his biggest problem yet when Chavez declared: “All the lands of the so-called Compania Inglesa will be nationalised now. I don’t want to lose another day. Free the land, free the slave labour.”

That meant around 300,000ha of land, all his remaining ranches and 120,000 cattle.

The Central Bank immediately approved funds for buying up the ranches. Chavez pointed out: “We must recognise what is really private land, we’re not stealing it from anyone. Some companies like this insist we pay them in foreign money. No – we are in Venezuela.”

The ranches passed to the state and the jobs of the workers were guaranteed. Some land was distributed to those who lived or worked on it to set up co-operatives, some continues production under state administration and some areas are being restructured for crop rather than cattle-farming.

Spam said: “We have been in constructive discussions with the Venezuelan government for some time now and we continue in that vein in order to find a friendly agreement.”

These discussions went on for about a year. But in October 2011 talks fell apart over the payment issue and lands were ordered to be taken by force.

Spam was offered compensation in the overvalued local currency and no other, a total of 274m bolivars (£46m).

Poor Spam was left without a single ranch.

Many economists, landowners, cattle-ranchers and general bigwigs were up in arms over these land-grabs.

Many peasants, workers, patriots and general country folk supported them.

But the government pointed out that Spam’s deeds had not been in order – and that anyway if you went back far enough the land had been nicked off the people in the first place.

It also reminded us that 90 per cent of the meat produced on these ranches was to be sold in Britain. Venezuelan land, Venezuelan cattle, Venezuelan labour, but virtually no meat for Venezuela at a time when the country was importing 70 per cent of meat consumed.

That this was A1 fertile land – perfect for crop production, not cattle-ranching.

And finally that there were millions of Venezuelans without land, houses or businesses who could benefit from the lots of all three owned by the absentee landlord.

So 2011 was the year that concluded the story of Spam in Venezuela. But not to worry – the third baron Vestey’s colonial adventures continue in, among other places, Australia, Brazil and China.

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June 14, 2012 - Posted by aletho | Economics, Timeless or most popular | Hugo Chávez, Robert Zoellick, Venezuela, Vestey Group