Caracas, March 6 (EFE) Agriculture Minister Elias Jaua has said that the government was taking over US food giant Cargill’s rice plant in Venezuela.
President Hugo Chavez Wednesday ordered the takeover of Cargill’s plant, accusing the company of violating laws intended to ensure people have access to high-quality food at a reasonable price.

“Begin the process of expropriating Cargill,” Chavez said during a televised cabinet meeting, but it was not clear whether the measure would affect only the rice-processing business or all the plants the US company operates in Venezuela.

Cargill’s Venezuelan subsidiary produces and distributes edible oils, rice, flour, pasta, sugar, coffee, milk, margarine, baking powder and pet food, among other branded products.

Jaua confirmed Thursday that the first phase in the process had been to “take control” Thursday of the Cargill rice plant, which is located in northwestern Venezuela, and officials expected “a friendly agreement” on the amount of compensation to be paid by the government.

Chavez also ordered during the meeting, which was partially broadcast by state-run VTV television, the start of “a legal investigation” into Cargill’s operations.

During the broadcast, Chavez spoke with Deputy Agriculture Minister Richard Canan, who Wednesday headed an inspection of Cargill’s “Cristal” rice-processing plant in the northwestern state of Portuguesa.

Canan said the inspection revealed that the mill was not producing white rice, which is subject to price controls, but instead other varieties that do not fall under the controls.

It also showed the company was sidestepping the law by not printing the regulated price on the rice packages the company distributes, Canan said.

That situation, Chavez said, constituted a “flagrant violation” and was causing an acute shortage of white rice in the Portuguesa region.

On Wednesday, Venezuela’s biggest food producer, Empresas Polar, said it brought a legal challenge to the leftist government’s takeover of one of its rice plants as part of an inspection process.

The company asked the Supreme Court to issue an injunction against the government’s planned 90-day occupation of a plant in the central state of Guarico belonging to the corporation’s Alimentos Polar subsidiary.

Chavez imposed price controls on staple foods in 2003 as part of an effort to control inflation, currently at 31 percent.