Venezuela's government is accelerating plans to expropriate local agribusinesses and extend state control over foreign oil and mining industries, fulfilling President Hugo Chávez's “revolutionary” economic agenda.

Hugo de los Reyes Chávez, the governor of the province of Barinas and the president's father, issued a decree on Monday expropriating a flour milling plant belonging to Polar, Venezuela's largest food company and the country's biggest private-sector employer.

The announced expropriation of some of Polar's assets, apparently without the prospect of financial compensation, heralds a new, more integrated phase in the government's land redistribution programme.

In recent weeks dozens of rural estates have been “intervened” in by officials from the national land institute, often accompanied by the military.

It is not clear whether the Polar plant, if confiscated, will be handed over to a workers' co-operative, as has been the case with other land expropriations, or whether the assets will be transferred to new business groups.

Lorenzo Mendoza, president of Polar, said last night: “We consider this decision to be unjust, disconcerting and unconstitutional.”

President Chávez says he will eliminate large landholdings as part of a drive to introduce what he terms “socialism of the 21st century”. But the move against agribusiness parallels a policy of extending government control over heavy industry. Rafael Ramirez, the energy minister, said this week that the government might take over oil fields operated by multinationals if the companies failed to comply with a new legal operating framework by the end of the year.

Oil companies are required to sign transitory operating contracts ahead of converting them into joint ventures with Petroleos de Venezuela, the state-owned oil company, in which the state will hold a majority stake.

Patrick Esteruelas, a Latin America analyst at Eurasia Group, said that while local agribusinesses such as Polar were likely to see expropriation, foreign oil and mining companies faced a different challenge.

“More strategic companies are likely to face tighter terms but are not likely to see their assets expropriated,” said Mr Esteruelas.

The likelihood of greater state control is also surfacing in the mining sector. Mr Chávez said last week that a gold mining region known as Las Cristinas “belonged to the state”. His comments prompted a sharp decline in the share price of Crystallex, a Canadian mining company planning to build what would be Venezuela's largest gold mining venture.

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