Venezuelan President Hugo Chavez ordered troops to take control of the country's rice processing businesses Saturday, saying some have balked at producing under regulated prices.

"This government is here to protect the people, not the bourgeoisie or the rich," Chavez said, ordering military authorities to "take control of and intervene in all of these businesses that process rice in Venezuela."

Chavez said some companies had threatened to paralyze production, but any rice processing plants that did so would be expropriated.

"I don't have any problem expropriating," he said. "And I'll pay them with paper, too. Don't think I'll pay them with hard cash."

The military intervention will affect Empresas Polar, Venezuela's largest food producer, as well as Corporacion Mary, which produces four types of rice under the brand name Arroz Mary, said Agriculture Minister Elias Jaua.

The occupation of installations "is the first measure we're going to take, and we're going to take it with Primor rice," Jaua said, referring to a plant in Portuguesa state that produces Polar's Primor-brand rice. "It is violating the laws and rules of the nation."

Guillermo Bolinaga, Polar's legal director, denied similar allegations by the nation's consumer protection agency Friday, calling the actions "illegal and arbitrary."

The agency suspended operations at the Portuguesa plant on Thursday for allegedly hoarding rice, El Universal newspaper reported.

Other major rice producers include Minneapolis-based Cargill, which owns the Santa Ana Rice Plant in Portuguesa state.

Venezuela regulates prices on many of its basic foodstuffs — including chicken, rice and sugar — to combat soaring inflation, which reached 30.9 per cent last year. Chavez last raised the price of rice a year ago, and consumers now pay just over $1 US per kilogram.

Chavez has often threatened to go after suppliers he has accused of hoarding food supplies to sell later at inflated prices. He first set his sights on Empresas Polar a year ago, calling it a "clear example" of the kind of business that is ripe for takeover.

In the past two years, Chavez has nationalized four major oil projects and major players in the electricity, steel and cement sectors.