What It's Like to Do Big Ag Business in Venezuela and Ukraine

What It Covers

Former Cargill executives Jeff Kazin and Mike Rolfsen share firsthand experiences operating agricultural businesses in Venezuela and Ukraine. They detail currency crises, hyperinflation, infrastructure challenges, security concerns, and the practical realities of maintaining food processing operations under socialist regimes and wartime conditions while navigating corruption without paying bribes.

Key Questions Answered

• •Currency dysfunction mechanics: Venezuela's bolivar collapsed from 1:800 to 1:12,000 in three years, forcing Cargill to create dedicated dollar-hunting teams. Companies couldn't import raw materials or spare parts without hard currency, requiring creative export schemes like shipping salt in metric ton bags to generate dollars for basic operations like buying Siemens electrical equipment.
• •Hyperinflation operational impact: When currency BTU value exceeded purchasing power, Venezuelans burned bolivars for fuel. The government couldn't pay printing bills for new currency, creating physical cash shortages. Employees spent entire days converting wages to goods immediately upon payment, eliminating productive work hours and creating massive economic drag across all business operations.
• •Multinational compliance advantage: Operating without paying bribes creates competitive advantage in food markets. Western companies like Nestle and breweries specifically partner with compliant multinationals because they guarantee food-safe products, contract reliability, and predictable delivery schedules. This brand value attracts premium customers despite higher operational costs in corrupt environments.
• •Infrastructure security requirements: Empty Venezuelan facilities get completely stripped within days as locals sell parts on black markets for dollar-denominated scrap value. Companies need constant armed security for compounds, trucks, and shipments between locations. Mexico operations still lose entire truck loads regularly. This security tax significantly drags down economic productivity across unstable regions.
• •Ukraine adaptation strategy: Farmers simplified crop selection from expensive sunflowers and corn to basic wheat and barley, which require less fertility input and cheaper seeds. Ukraine's rich organic soil supports lower-intensity crops. Grain exports continue through improvised Danube River transshipment points using cranes rather than damaged main elevators, maintaining supply despite infrastructure destruction.