Venezuela's Hugo Chavez warns banks of nationalisation

Venezuelan President Hugo Chavez shakes hands with a farm worker during his weekly radio and TV programme Mr Chavez says small farmers need credit to boost food production

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Venezuelan President Hugo Chavez has warned that he could nationalise banks that refuse to finance agricultural projects backed by his government.

Mr Chavez said some leading banks were failing to comply with a legal requirement that at least 10% of their lending should support development.

"If you can't do it, give me the banks," he said.

The government has taken over several private banks in recent years over alleged irregularities.

'No alternative'

Mr Chavez was speaking during his weekly radio and television programme, which was broadcast from Barinas state in Venezuela's central plains, an important farming and cattle-ranching region.

He named three banks in particular - Banesco, Banco Mercantil and Banco Provincial - and accused them of favouring loans to large landowners and businesses rather than small farmers.

"Banks of Venezuela, private and public, either you finance agricultural production or we will take measures. There is no alternative," he said.

"We will pay the owners what the banks cost and in two years we will recover the investment," he added.

Mr Chavez also said he would step up the expropriation of large estates to give land to small farmers.

The process of agricultural reform has given many of Venezuela's rural poor the chance to farm for themselves for the first time.

But critics - including large ranchers and farmers who have lost their land - say production has suffered as a result, putting pressure on food supplies and prices.

Mr Chavez - who has governed Venezuela for 13 years - is seeking re-election in October in order to deepen the socialist "revolution" in Venezuela.

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