Venezuela was once the richest country in South America, but food prices have skyrocketed in recent years, forcing many to scavenge for things to eat. The cost of basic groceries is now about five times the minimum wage.

Price of basic groceries 1,000,000 Bolivares 800,000 600,000 400,000 Monthly minimum wage 200,000 ’98 ’05 ’10 ’15 ’17 Price of basic groceries 1,000,000 Bolivares 800,000 600,000 Monthly minimum wage 400,000 200,000 ’98 ’05 ’10 ’17 ’15 By The New York Times | Sources: CENDAS-FVM, Sary Levy, professor at the Central University of Venezuela | Minimum wage includes monthly food ticket | Measure for basic groceries based on the National Institute of Statistics’ monthly nutritional requirement for a family of five | As of May 2017

On July 1, the monthly minimum wage was raised for the third time this year, to help control inflation. Still, the increase does little to help struggling families, and the country’s inflation rate could reach 720 percent this year, according to the International Monetary Fund.

A woman affected by tear gas fired by security forces was carried away last month in Caracas. Her sign reads in Spanish: “Bombs. Not food. Yes, hunger advances.” Fernando Llano/Associated Press

Since April, protesters have taken to the streets, demanding international food aid and early presidential elections. More than 90 people have been killed in the demonstrations. A local human rights group reported that more than 3,600 people have been arrested.

Here are the factors that led to the food crisis.

Venezuela overspent during a period of high oil prices.

Elected in 1998, President Hugo Chávez became widely popular for his promise to share the country’s oil wealth with the poor and to guarantee food security. To fund his “21st Century Socialism” agenda, he relied on oil revenues, which accounted for 93 percent of exports in 2008.

Oil price boom Price per barrel $100 80 60 40 20 2000 ’05 ’10 ’15 ’17 Oil price boom Price per barrel $100 80 60 40 20 2000 ’05 ’10 ’15 ’17 By The New York Times | Source: World Bank Global Economic Monitor Commodities | As of May 2017

The government imported goods and sold them at subsidized prices to make food affordable to the country’s poor.

Oil price boom period Imports Imports increased during the oil price boom... $60 billion 40 ... then plummeted 20 2000 ’05 ’10 ’16 Oil price boom period Imports Imports increased during the oil price boom... $60 billion 40 ... then plummeted 20 ’00 ’05 ’10 ’16 By The New York Times | Source: Ecoanalítica | Estimates for 2015 and 2016

When oil prices collapsed, government spending became unsustainable.

By late 2014, oil money stopped flowing in. Venezuela had saved little from the oil price boom of the 2000s. Under Mr. Chávez’s successor, President Nicolás Maduro, the country slashed imports and used thinning reserves to pay its foreign debt and avoid default. As a result, food and medicine became scarce.

Oil price boom Imports and foreign reserves $60 billion Imports 40 20 Foreign reserves 2000 ’05 ’10 ’15 ’17 Oil price boom Imports and foreign reserves $60 billion Imports 40 20 Foreign reserves ’00 ’05 ’10 ’15 ’17 By The New York Times | Sources: Central Bank of Venezuela, Ecoanalítica | As of March 2017

Compounding the problem, a series of government actions paralyzed local food production.

For years, oil revenues enabled the government to import most consumer goods. Meanwhile, the government increased regulations, stifling domestic production. When the country cut imports, weakened local producers could not keep up with demand.

Seizing private property The government tried to redistribute the country’s wealth by aggressively taking over hundreds of private companies and hundreds of thousands of acres of land. This policy was designed to shift ownership from private hands to government control, said Daniel Varnagy, a professor at Simón Bolívar University. But the seized assets were poorly managed, further weakening domestic production.

Controlling currency exchange Private companies that survived the government seizures faced additional hurdles. The government created currency exchange controls in 2003, becoming the sole administrator of American dollars in the country. Most private companies struggled to buy the dollars they needed to import raw materials and machinery to produce goods locally, said Ricardo Hausmann, director of the Center for International Development at Harvard’s Kennedy School. This opened the door to a currency black market, where a dollar can now be sold for more than 700 times its value.

Black market rate 7,678 Bolivares Bolivares per dollar 7,000 5,000 3,000 Official rate 10 Bolivares 1,000 2010 ’12 ’14 ’16 ’17 Black market rate 7,678 Bolivares Bolivares per dollar 7,000 5,000 3,000 Official rate 10 Bolivares 1,000 2010 ’12 ’14 ’16 ’17 By The New York Times | Sources: Central Bank of Venezuela, DolarToday.com | Official rate is one of two legal rates. It is used for imports of basic products. | As of July 5, 2017

The government further restricted access to United States dollars after oil prices crashed, giving the public sector priority access and forcing more private companies to the black market. Unable to afford prices on the black market, many cut imports, leading to even more products vanishing from the shelves.

Oil prices start to drop Imports by sector $40 billion Private 30 20 10 Public 2000 ‘05 ’16 ’10 Oil prices start to drop Imports by sector $40 billion Public 30 20 10 Private 2000 ‘05 ’10 ’16 By The New York Times | Source: Ecoanalítica | Estimates for 2015 and 2016

Regulating production With fewer subsidies on products, the government implemented the Fair Price Law to keep costs affordable. The new law regulated the production, distribution and pricing of products. These measures made many companies unprofitable, causing them to stop producing and worsening shortages, said Félix Seijas, a professor at the Central University of Venezuela. In addition to the high costs, farmers complained that fertilizer and farming equipment were mostly unavailable, and if a piece of machinery broke, the entire supply chain could shut down.

But the government blames an “economic war” waged by its opposition and foreign enemies for the food scarcity, accusing private companies of intentionally cutting back production in an attempt to destabilize the country.

As a result, Venezuelans have turned to expensive imports or to the black market. For many people, staples like eggs and rice have become unaffordable.

Food prices in Bolivares Fixed prices Prices Venezuelans often pay Rice Corn flour Ground beef Powdered milk Eggs Sugar Coffee 0 3,000 6,000 9,000 12,000 15,000 Food prices in Bolivares Fixed prices Prices Venezuelans often pay Rice Corn flour Ground beef Powdered milk Eggs Sugar Coffee 12,000 15,000 3,000 6,000 0 9,000 By The New York Times | Sources: CENDAS-FVM, National Superintendence for Defense of Socioeconomic Rights | Prices for 1 kilogram, except for eggs (30 units) and coffee (0.5 kilogram) | As of April 2017

These policies led to food scarcity and more poverty.

During the oil price boom, the percentage of households in poverty fell to 29 percent from 53 percent. The government has not released poverty data since 2015. But a survey by three of the top universities in the country indicates that in recent years the government underestimated the level of poverty, which reached 82 percent in 2016.

Percentage of households in poverty, according to: Survey by top universities The government 80% 60 40 20 Oil price boom 2000 ‘05 ‘10 ‘16 Percentage of households in poverty, according to: The government Survey by top universities 80% 60 40 20 Oil price boom 2000 ‘05 ‘10 ‘16 By The New York Times | Source: Venezuela’s National Institute of Statistics, Venezuela Living Conditions Survey (ENCOVI 2016) by the Central University of Venezuela, the Andrés Bello Catholic University and Simón Bolívar University.