Chavez orders temporary seizure of rice mills

President Hugo Chavez on Saturday sent troops to temporarily take over rice processing plants in the South American nation, his toughest move against industry since winning a referendum last month.

In a dispute over the price of one of Venezuela’s staples, Chavez told soldiers to take control of the rice mills, which could include installations owned by U.S. giant Cargill.

“I have ordered the immediate intervention in all those sectors of agro-industry, intervention by the revolutionary government,” Chavez said during a speech to commemorate riots over high prices 20 years ago that left 300 dead.

Chavez accused the companies of disrupting the supply chain by refusing to provide rice at prices set by the government.

Government officials entered a mill owned by Venezuela’s top food company, Grupo Polar, on Saturday afternoon and said they would increase its output overnight.

Chavez won a referendum vote in February abolishing term limits, thus allowing him to stay in office as long as he wins elections.

The socialist president, who has already governed for a decade, often radicalizes his policies after electoral victories and has nationalized large parts of the Venezuelan economy in recent years.

Venezuela’s rice millers association said its members were producing what they could with available stocks of the grain and had not been formally notified of Chavez’s order.

Chavez warned he would nationalize the rice industry if companies tried to further interfere with supplies of the grain.

“I will expropriate them. I have no problem with that, and I’ll pay them with bonds. Don’t count on me paying with hard cash,” Chavez said.

In the past, Chavez has paid reasonable compensation for takeovers, but falling oil prices may limit his ability to pay this time.

The Venezuelan government imposes price controls on basic products and frequently accuses private companies of hoarding food.