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How the rising price of corn made Mexicans take to streets

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  • Walter Lippmann
    (From PORTSIDE. This is exactly what Fidel said would happen.) =================================================================
    Message 1 of 1 , Jun 30, 2007
      (From PORTSIDE. This is exactly what Fidel said would happen.)
      =================================================================

      http://news.independent.co.uk/world/americas/article2697788.ece
      The Independent (UK)
      June 23, 2007

      How the rising price of corn made Mexicans take to streets
      By Jerome Taylor

      Mexico was ablaze in late January. Just two months after the election
      of Felipe Calderon as Mexico's President, protests had broken out
      across the country.

      Thousands of people were marching on the main cities calling on their
      pro-free trade businessman President to halt a phenomenon threatening
      the lives of millions of Mexicans.

      In their hands the protesters clutched cobs of corn, the staple crop
      that makes tortillas and for many of Mexico's poor the main source of
      calorific sustenance in an otherwise nutritionally sparse diet.

      Over the past three months the price of corn flour had risen by 400
      per cent. Despite being the world's fourth largest corn producer and
      a major importer of supposedly cheap American corn, millions of
      Mexicans found the one source of cheap nutrition available to them
      was suddenly out of reach.

      Poor Mexicans, who normally expect to set aside a third of their
      wages for corn flour, had always been particularly vulnerable to
      price fluctuations in the corn market, but a four-fold increase was
      both unheard of and potentially catastrophic.

      The reason for such a substantial increase in the price lay north of
      the border. In order to wean itself off its addiction to oil, the US
      was turning to biofuels made from industrial corn like never before.
      Farmers in Mexico and America had been replacing edible corn crops
      with industrial corn that could then be processed into biofuels,
      leading to a decrease in the amount corn available on the open
      market.

      As corn imports and domestic production dropped, greedy wholesalers
      in Mexico began hoarding what supplies they could get their hands on,
      forcing the price of corn to rise astronomically. Eventually
      tortillas became unaffordable, so people took to the streets.

      President Calderon found himself caught between a rock and a hard
      place. On the one hand were the corn importers and major
      multinationals who would not look kindly on any government
      intervention on the free market. On the other side were Mexico's
      teeming poor, the vast majority of the population who already viewed
      Mr Calderon as a discredited pro-business leader that ignored the
      needy.

      In the end, Mr Calderon compromised. He capped the price of flour at
      78 cents per kilogram but made the scheme voluntary for businesses.
      So far the price has largely stabilised but many are becoming
      increasingly concerned that Mexico's tortilla wars were simply the
      sign of things to come. "Recently there's been a huge increase in the
      demand for industrial corn for the production of ethanol which
      inevitably pushes up the price of food stuffs," says Dawn McLaren, a
      research economist at the W P Carey School of Business in Phoenix,
      Arizona. "But if we get a particularly bad harvest or if a weather
      system like El Niño strikes we could be really stuck."

      Mrs McLaren says that as the West looks to replace its oil, poor
      people will pay the price. "It doesn't strike me as a very good idea
      to start using yet another vital and limited resource to wean
      ourselves off oil," she said.
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