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Latin America News: Presidents of Venezuela, Colombia Meet to Disscuss Food Smuggling and Shortages

First Posted: Aug 02, 2014 04:04 PM EDT
Colombian President Juan Manuel Santos

Photo : Andrew Harrer-Pool / Getty Images

The presidents of Venezuela and Colombia met to discuss the ongoing problem of food smuggling and shortages on Friday.

Venezuela has suffered ongoing food shortages because of rigid currency controls and a shortage of dollars, making it difficult to find imported basic products, according to the Guardian.

Additionally, the shortages have created a hoarding dilemma, as wealthier families are buying up the food and reselling it at higher prices, rather than the subsidied prices enacted by President Nicolás Maduro. Some are selling to Colombia since the exchange rate results in a profit for the sellers, according to Colombia Reports.

In April, Maduro rolled out a new program to prevent hoarding by tracking the purchases of each family, but as recently as July food was being smuggled into Colombia, where some border towns are used to illegally resell the food back to Venezuelans at higher prices, according to Fox Latino.

More than 11 tons of fish, chicken and beef were seized in July.

Maduro went to Cartagena, a coastal city in Colombia, to meet with President Juan Manuel Santos about a variety of topics, but the smuggling was a top priority.

"We agreed on a plan concerning smuggling (in February), at least the plan is designed. In Colombia, it has allowed us to substantially increase seizures, which have already reached 738,000 million pesos (about $393.8 million)," Santos said, according to La Tercera.

The result is a 29 percent shortage of basic foods in Venezuela. The food shortage is based on the availability per store -- so out of every 100 stores, 29 are unable to provide basics.

The shortages, a result of economic problems in Venezuela, were discussed with a solution in mind. Venezuela and Colombia agreed to a special exchange rate in order to boost trade between the two countries, according to Today.

"We have established a system, a mechanism for bilateral payments, to facilitate the financial aspect of trade," Santos said.

The system will allow the two countries to trade based on their own currencies, which especially help Venezuela's oil exports -- since importers are struggling to find the dollars which are controlled by the government.

Trade overall between the two countries has fallen by 70 percent in five years because of political disagreements between both presidents' predecessors.

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