Cover Story

Romancing the corn

The price of a tortilla is going up-and the United States is partly to blame. America's infatuation with ethanol has a price south of the border. And in the aftermath of tight elections in Mexico, it's enough to shake the political landscape

Issue: "Tortilla wars," March 10, 2007

MEXICO CITY- "He is a thief!" one demonstrator shouted. The next indignant leftist, 23-year-old student Alán Rodin, went further: "Your president, Felipe Calderón, is more than a thief! He is taking all the corn, too! He wants you to starve! Calderón cares nothing about us-not you or me!"

When President George Bush comes here next week to visit Calderón, who won the presidency in a July election almost as close as the Bush-Gore hanging-chad election in 2000, he should hope he's adequately briefed on how the U.S. ethanol craze is affecting the lives of the poor and breathing new life into leftwing politics south of the border-in this case, the political party of Andrés Manuel López Obrador, who lost narrowly last year.

Bush proposed in January a four-fold increase in the use of ethanol, which is made from corn, as a substitute for Middle Eastern oil. That's good for U.S. farmers but bad for Mexicans who have become reliant on American-produced corn. The growing of hybrid corn in the United States is so efficient that, despite the distances involved, American corn in Mexico often costs less than Mexican corn. Many Mexican farmers, unable to compete, have turned to other crops. Basic economics: Demand now exceeds supply, so the price of corn in Mexico City has doubled.

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"We don't have the luxury of choice," complained Jairo Castro, a Mexico City plumber. Nationally, Mexican per capita consumption of corn is more than one pound per day, and estimates put tortillas at about 70 percent of the daily caloric intake in rural areas. This means poor families now pay a quarter of their income, or more, for a staple-double what they paid last year.

President Calderón has lately addressed the crisis, assuring Mexicans that he "will not tolerate speculators or those who seek to monopolize" corn prices. A price cap of 8.5 pesos per kilogram of tortillas was supposed to give that promise some teeth. Yet price caps won't withstand for long the waves of demand, and every Mexican knows several vendors who still charge 10 pesos or more. There is added grumbling about the concentration of Mexican tortilla production in the hands of a few companies: The behemoth Grupo Gruma controls as much as three-fourths of all Mexican corn flour.

Calderón doubled the quota on duty-free imported corn. On Jan. 18 he raised it by 110,000 tons, but prices leapt higher, so on Feb. 8 he tacked on another 600,000 tons. The increases deal primarily with white corn imports, which is used for tortillas. Ethanol, on the other hand, is made from yellow corn-a fact that has prompted the biofuel industry to describe the link between ethanol production and tortilla prices as tenuous. But Mexican officials say the correlation is simply that the soaring price of yellow corn has had a knock-on effect on white corn as well.

So what of the Mexican government's responsibility? A 54 percent tariff comes with all white corn imported over quota (it was 72 percent in 2004), so importers need the government to sign off on foreign white corn purchases. By quotas and tariffs, Mexico has been striving for autonomy in the white corn industry, critics note, but at what cost?

Meanwhile, Obrador supporters consider him "el presidente legítimo," the real president, and mount daily anti-Calderón demonstrations. One last month, at the statue of revolutionary hero Benito Juárez in Alameda Park, featured 100 demonstrators passing around a megaphone amid shouts of "thief." Meanwhile, vendors hawked pro-Obrador paraphernalia alongside stacks of pirated Elvis CDs. T-shirts with slashes across Calderón's screen-printed face were 80 pesos, and 35 gave the buyer his pick of poor-quality Obrador posters. (Some posters paid Obrador odd compliments: one read "El Super Gallo," or "The Super Rooster.")

This protest was bantam-weight compared to the larger, fiercer protests that raged for months after the presidential election, or even one on Jan. 31, when 75,000 cheered Obrador's attack on rising corn prices and "a government dominated by white-collar criminals." Still, the demonstrators interlocked arms and marched to Paseo de la Reforma, a boulevard that looks like the Champs-Élysées but has, for Mexicans, the significance of Philadelphia's Liberty Bell. From there they marched to the office building housing Televisa, Latin America's largest news station, which the protesters said has a pro-Calderón bias.

They halted before a large, graffiti-tagged, 30-foot-high cement wall on the building's street side. Two of the protesters were Adolfo and Lourdes Barajas, owners of a tortilleria in the Obrera neighborhood about 30 blocks away from Televisa's building. They go to demonstrations rarely, but friends had invited them because of their "great story of struggle" in the corn crisis. Other protesters had signs and ears of corn to wave or fists to clench; the Barajases looked like uncomfortable tourists.


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