Mexican Peasants Want the Government's Ear on Corn Issues

After the very close national election late last year in Mexico, the losing candidate, Andres Manuel Lopez Obrador, vowed to set-up a shadow government and to put rioters into the streets. Indeed it was feared for a while that civil war might develop between the more elite North and the poorer South.

But something happened on leftist candidate Señor Obrador’s road to redemption. In a word his bright comet tail appears to have burned out. Most likely what happened to Señor Obrador is that he ran out of money and as that dried up so did his support among the poor Mexicans of the south. He has also been around a long time and people tend to tire of familiar faces especially when they are identified with losing causes.

This week there has been an ideal opportunity for Obrador to stage a comeback, but the new opposition in Mexico specifically requested that he stay on the sidelines.

The issue is corn and the skyrocketing prices for tortillas, a flat bread made of white cornmeal. Since this food is the basic staple of the poor of Mexico, any dramatic rise in its price is bound to cause misery and outrage amongst the working and impoverished classes of America’s southern neighbor.

Obrador saw a great opening to lead the tortilla march directly into the heart of Mexico City, but the march’s organizers wanted no part of him at the head of their parade.

"The idea is that we concentrate on the general objectives of the march and not on personalities," said Geraldo Sanchez, a leader of the tortilla protest and the head of the Permanent Agrarian Council.

Over the last year, Mexican tortilla prices have more than doubled and now cost about 45 cents a pound.

What is really behind the spike in this commodity appears to be the relatively new push in North America for alternative fuels to help rid the Western Hemisphere and particularly the U.S. of its dependence on foreign oil. As a result, ethanol is now the latest domestic fuel alternative under massive development.

In order to produce ethanol, yellow corn must be utilized. Last year, ethanol uses grabbed an astonishing eighteen to twenty percent of the total crop, up three times from their total take of just a few years ago. Thus, exporting America’s yellow corn costs importers like Mexico much more than they have ever paid before.

Traditionally, Mexico has bought U.S. yellow corn for feed for its cattle business and for the start up of its own ethanol programs while it grows mostly white corn for its human consumption. Now, however, since the price for yellow corn is rising fast, more Mexican lands are being put into yellow production and less into white and that has spiked, at least for now, the price of white corn.

U.S. News and World Report’s current cover story (February 12) on ethanol points out that:

"Ethanol already consumes so much corn that signs of strain on the food supply and prices are rippling across the marketplace."

Since Mexican President Felipe Calderon took office in December, he has drawn a lot of criticism for failing to control the sudden rises in tortilla prices. To do so requires a delicate balance between the growers of yellow corn and the growers of the white.

As an advocate of free-market forces, President Calderon does not favor a return to direct price controls enforced under many former Mexican administrations.

However, he also wants to remain in office without opposition forces finding an issue that resonates with Mexico’s impoverished. The last election was close enough to suggest it would be unwise to unnecessarily rile up a large part of the electorate at this early stage of his administration.

Consequently, Calderon signed an accord just three weeks ago, on January 18th, with business organizations to try and limit tortilla prices to about 35 cents a pound. But the accord is purely a gentleman’s agreement with the farming cartels with no legal backing and given the high prices for corn purchases now in the U.S. especially, and for Mexico’s own ethanol development as well, there is little reason to think that the price will stabilize at the lower rate, because more farmers want to grow the yellow where the bigger future appears to be.

If narrowly defeated Presidential candidate Lopez Obrador was still strong and wildly popular amongst his own people there is little doubt that the future of the Calderon Administration and even of regional peace could be in serious jeopardy. But the organizers of the great tortilla march see Obrador as a "personality" and they want instead to concentrate just on the issue. But issues without a figurehead to lead the charge rarely catch enough fire to burn up the status quo.

So yellow corn appears now to be the new gold and the business of using it to enrich the few at the hands of the many appears to be firmly in place in Mexico. As long as ethanol producers are buying, and as long as the price of imported yellow keeps rising, Mexico wants to be growing more of it themselves, even if it means that their most needy citizens, those earning only the minimum wage of $4 a day, will have to do without their basic staple of white corn or spend up to a third of their income just to eat.

What is needed, of course, is a balance between our legitimate desires in the Western Hemisphere for non-imported oil, from the mid-east especially, while at the same time not impoverishing and starving Mexico’s and some of our own citizens of their basic food. While we have a shortage of cheap oil today, we do not want a shortage of available labor tomorrow.