The Cacao Monopoly Under Maduro

The Cacao Monopoly Under Maduro

By Diálogo
October 18, 2019

In the cacao-growing region of Barlovento, in Miranda state, about 62 miles west of Caracas, the Venezuelan chocolate business is a bitter one. While producers in the region face a series of obstacles — red tape, theft, and even the confiscation of cacao beans by security forces — members of a company linked to the Maduro regime rub elbows with chocolate distributors in the most important events of the sector worldwide.

Although Venezuelan cacao represents only 1 percent of the cacao traded worldwide, according to the International Cocoa Organization, it is sought after as one of the best for its aroma and quality.

The Flores and cacao

According to investigations from the Venezuelan digital platform Armando Info, Integrated Agriculture Specialists (ESAICA, in Spanish), a company created in Barlovento in 2015, counts among its members relatives of Cilia Flores, Nicolás Maduro’s wife. Among them are Mariana Staudinger, wife of Yosser Gavidia Flores (Cilia Flores’ son); and Jenifer Fuentes, the partner of Walter Gavidia Flores (Cilia Flores’ son). Also listed as a member is Erika Albornoz Gavidia, the niece of Walter Gavidia Rodríguez, a chavista leader and Cilia Flores’ ex husband.

In July 2019, the U.S. Treasury Department sanctioned Mariana Staudinger, Yosser Gavidia Flores, and Walter Gavidia Flores for their participation in acts of corruption involving the Maduro regime’s national program of subsidized food, known as CLAP. According to Armando Info, another member is Mario Bonilla, a friend of Cilia Flores’ children and one of the suspects named in a Florida court in 2018 for participating in a $1.2 billion money laundering scheme.

“They are using the same scheme with cacao that they are trying to use with gold,” a spokesperson for Acción Campesina (Farmer’s Action), a Venezuelan organization that defends farmers’ rights, told Diálogo. “There is a criminal structure around the cacao industry, including State security forces, which affects some producers, while others remain untouched. All this to benefit the government,” said the man, who asked to remain anonymous for fear of retaliation.

Although ESAICA is located in the most violent area of the country, with the highest homicide, kidnapping, and theft rates, according to civil organizations such as the Venezuelan Violence Watch (OVV, in Spanish) and Acción Campesina, the company doesn’t experience the same problems as the other producers. On its website, the company promotes its business with photo galleries of its fair stands in France, Japan, and the Netherlands, and with serene images of its fields.

Other producers, however, face increasingly difficult scenarios. Many fall prey to thieves who steal cacao in the fields and sell it on the black market and to criminal gangs who extort them, OVV says. For its part, the government halts cacao exports with red tape, imposing up to 20 bureaucratic steps with different ministries to be able to export.

In December 2018, producers told international news agency Reuters that they had lost more than 80 tons of cacao beans at government checkpoints. More recently, in May 2019, the Bolivarian National Guard in Miranda said on its Twitter account that it had confiscated more than 56,200 pounds of cacao due to the lack of legal documentation.

“Convoys carrying their [ESAICA’s] cacao are protected by the National Guard, while others are detained and seized by the same National Guard,” said Acción Campesina’s spokesperson.

The affected producers tried to recover the product and filed complains with several government offices, Armando Info said, but the cacao was handed over to the Venezuelan Cacao Socialist Corporation (CSCV, in Spanish), a department under the Ministry of Agriculture that manages and develops State activities in cacao production, processing, and distribution.

A bureaucratic maze

In Miranda state, producers face additional difficulties since chavista Héctor Rodríguez became governor in October 2017. Under his plan “Miranda Smells Like Cacao,” Rodríguez created a bureaucratic structure that regulates cacao prices, imposes a fee on the producer, which is paid at the corresponding municipality, and then exports the product at international prices.

According to the Venezuelan think tank Dissemination of Economic Knowledge for Freedom Center (CEDICE Libertad, in Spanish), a ton of Venezuelan cacao is valued at up to $8,000. The government claims to produce 35,000 tons of cacao per year.

Few companies manage to beat the system, CEDICE Libertad says, and producers are forced to sell their goods to the government at a much lower price than they’re worth.