[lbo-talk] Market pressures on corn production stir fears in Mexico

Steven L. Robinson srobin21 at comcast.net
Fri May 4 22:11:59 PDT 2007


Market pressures on corn production stir fears in Mexico

Sergio Solache The Arizona Republic May. 4, 2007 12:00 AM

Tehuacán, Mexico - Marco Antonio Carrillo stood at the mouth of a dusty cave beneath a cactus-covered promontory in eastern Mexico.

"This," he said, "is the reason that Tehuacán is called the cradle of corn."

Here, buried in the ground outside the Cave of Coxcatlán, archaeologists have found tools and seeds that show how early Mexican farmers, working over a span of 5,000 years, turned a wild plant into one of the world's most common foods. advertisement

Now, many Mexicans fear they are losing control of their own invention. The Mexican government is struggling to keep corn costs steady after the U.S. push to produce ethanol caused a jump in world prices. Environmentalists are worried about new pressure to allow genetically modified seeds into Mexico, and small farmers fear they will be wiped out by U.S. competitors once Mexico eliminates corn tariffs in 2008.

"Not only are there risks to our production, business relations and economics, there is a risk of upsetting the entire social situation in Mexico," said Rafael Galindo, president of Mexico's Center for Independent Growers.

Culture of corn

Cornmeal is the staple food of Mexicans. Each Mexican eats 11.5 ounces of corn every day, or about 10 corn tortillas, according to the Health Secretariat.

Mexican tribes began breeding corn from a wild grass called teozintle around 5000 B.C., archaeologists say.

"This is what brought about the process of civilization," said Carrillo, director of the Tehuacán Cultural Center. "As agriculture developed in terms of corn, the civilization rose up around it."

Today, Mexicans eat corn tamales for breakfast, tacos wrapped in corn tortillas as a midmorning snack, and more tortillas with lunch. After dinner, families eat corn tamales sweetened with pineapple.

So when the price of corn soared last year, the effect was devastating to many.

The increase began after President Bush announced a package of incentives for ethanol producers in his 2006 State of the Union address. Speculators began snapping up corn futures, said Jaime Yesaki, president of Mexico's National Agricultural Council.

Most ethanol in the United States is made from yellow corn, while white corn is used for tortillas and other Mexican staples. But as the price of yellow feed corn rose, meat producers in Mexico began buying white corn for their animals.

By January, the price of corn tortillas had risen to 50 cents a pound in some areas of Mexico, up from about 25 cents a few months earlier. Angry consumers marched in the streets of Mexico City.

To stabilize prices, President Felipe Calderón authorized more imports of U.S. corn and promised aid to encourage production. He also struck an agreement with retailers to hold prices at 35 cents a pound. On April 25, the price cap was extended until Aug. 15.

The cost of corn futures has dropped since March, as U.S. farmers begin planting more corn to meet the demand.

Still, the jump in food prices scared many Latin Americans.

In the genes

As Mexicans fret over tortilla prices, agricultural corporations and state governments have begun complaining about Mexico's rules against planting genetically modified seeds.

"If we want to be self-sufficient and improve the productivity of corn, we have to let in the transgenetics," Sonora Gov. Eduardo Bours said in February. His family business is Mexico's biggest poultry producer.

Environmental groups say the advantages of genetically modified seeds are overblown and poorly matched to Mexico's soil and mild climate.

"We don't need transgenetic seeds to produce food," said Gustavo Ampugnani, an official with Greenpeace Mexico.

Some experts fear that modified corn could crossbreed with Mexico's original strains. That is worrisome, they say, because humanity needs to preserve those strains in case a problem develops with the genetically modified varieties.

Foreign competition Mexican farmers fear they will be at a worse disadvantage against U.S. competitors when Mexico drops its tariffs on corn and beans in 2008 as part of the final phase-in of the 1994 North American Free Trade Agreement. Mexico now charges an 18.2 percent tariff on imports over 3.7 million tons each year.

The opposition Democratic Revolutionary Party, which narrowly lost the 2006 presidential election, is demanding that the tariffs be maintained.

Mexican growers also are handicapped by the small size of their farms, a legacy of the 1910-20 Mexican Revolution, which split the country's huge plantations into communal farms called ejidos.

As ejido members divide their lands among their children, the parcels have gotten smaller.

Mexican farmers also have poorer infrastructure and soil, and only 14 percent of corn farmland is irrigated. Also, most small producers don't participate in a futures market, which would allow them to sell their harvest before it is planted, said Yesaki of the National Agriculture Council.

Unless Mexico quickly increases its subsidies, many small farmers could be driven out of business, he said.

Reporter Chris Hawley contributed to this article.

http://www.azcentral.com/arizonarepublic/news/articles/0504cornpolitics0504. html

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