Venezuelan farmers' use of purchased inputs--such as fertilizers, tractors, and irrigation water--to increase their productivity, remained closely tied to government promotional policies. For example, Venezuelan farmers enjoyed generous subsidies for the purchase of domestically produced fertilizers after 1958. As a result, fertilizer use increased greatly. From 1980 to 1986, the application of fertilizers more than doubled, from 64 to 141 kilograms per hectare. In 1989 the Pérez administration reduced fertilizer subsidies from 90 percent to 30 percent. This action had little effect on agricultural production because fertilizer usage already exceeded optimum levels in many areas.

In 1989 MAC administered twenty-four irrigation projects that covered 261,600 hectares. Only 40 percent of this irrigated area, however, actually received water from irrigation projects. Poor management and inadequate maintenance of the irrigation systems prevented the remainder of the land from reaching its full potential. Nonetheless, irrigation projects enabled the country to improve its productivity and self-sufficiency in some crops, most notably rice.

Credit and agricultural extension services were two other tools employed by the government to improve farming practices. Successive governments, beginning in the 1960s, established scores of development finance institutions exclusively for agriculture. In the 1980s, dozens of such lenders provided finance for agriculture at widely varying rates depending on the loan, the product involved, and the type of institution from which it originated. Commercial banks also held extensive agricultural portfolios as government laws required that 22.5 percent of all credit be allocated to that sector. In addition, bankers and other government finance institutions lent to farmers and ranchers at a rate as low as one-third of the prevailing commercial rate. By contrast, government agricultural extension efforts were less aggressive. The country's extremely low yields in many crops and livestock were attributable, in part, to the inadequacy of extension services. MAC's National Agricultural and Livestock Research Fund (Fondo Nacional de Investigaciones Agropecuarios) performed research and provided some minimal extension services for farmers. Universities and institutes, such as the Simón Bolívar United World Agriculture Institute in Caracas, also contributed to agricultural and environmental research. More typically, farmers obtained technical assistance from producer associations to which they belonged.

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Source: U.S. Library of Congress