Saturday, January 27, 2007

To starve Mexicans or drill in ANWAR

A Culinary and Cultural Staple in CrisisMexico
Grapples With Soaring Prices
for Corn -- and Tortillas
By Manuel
Roig-FranziaWashington Post Foreign
ServiceSaturday, January 27, 2007;
A01
NEZAHUALCOYOTL,
Mexico -- Thick,
doughy tortillas roll hot off the conveyor belt
all day at Aurora Rosales's
little shop in this congested city built on a dry
lake bed east of Mexico
City.
Using cooking techniques that date to the Mayan
empire, Rosales has
never altered her recipe. Nor did her father, grandfather or
great-grandfather.
On good days, the neighbors line up for her
tortillas.
But these are not good days, and sometimes hours pass without
any
customers.
Mexico is in the grip of the worst tortilla crisis in its
modern
history. Dramatically rising international corn prices, spurred by
demand for
the grain-based fuel ethanol, have led to expensive tortillas.
That, in turn,
has led to lower sales for vendors such as Rosales and angry
protests by
consumers.
The uproar is exposing this country's outsize
dependence on
tortillas in its diet -- especially among the poor -- and
testing the acumen of
the new president, Felipe Calderón. It is also raising
questions about the
powerful businesses that dominate the Mexican corn
market and are suspected by
some lawmakers and regulators of unfair
speculation and monopoly
practices.
Tortilla prices have tripled or
quadrupled in some parts of Mexico
since last summer. On Jan. 18, Calderón
announced an agreement with business
leaders capping tortilla prices at 78
cents per kilogram, or 2.2 pounds, less
than half the highest reported
prices. The president's move was a throwback to a
previous era when Mexico
controlled prices -- the government subsidized
tortillas until 1999, at
which point cheap corn imports were rising under the
NAFTA trade agreement.
It was also a surprise given his carefully crafted image
as an avowed
supporter of free trade.
"There are certainly some
contradictions in
Calderón's positions here," said Arturo Puente, an economist
at the National
Institute for Forestry, Agriculture and Livestock Research in
Mexico
City.
Calderón's administration portrayed the cap as a get-tough
measure
that, coupled with his earlier approval of new corn imports from the
United
States and other countries, would stem the crisis. In an interview two
days
before the price-cap announcement, Calderón's undersecretary of industry
and
commerce, Rocio Ruíz Chávez, boasted that Mexico's tortilla problems would
stabilize in "one to two weeks."
But Calderón's price cap does not carry
the
force of law. It is "a gentleman's agreement," said Laura Tamayo, a
spokeswoman
for the Mexico division of Cargill, a Minneapolis-based company
that signed the
pact and is a major player in the Mexican corn market.
A
study this week by
the lower house of Mexico's National Congress showed that
many tortilla makers
are ignoring Calderón's edict. The average price of
tortillas is 6 cents higher
than the cap, and some shops are charging
between 59 cents and $1.04 above the
government threshold.
"Going ahead,
it looks very good for high corn prices,"
said William Edwards, an
agricultural economist at Iowa State University.
In
another place, a rise
in the cost of a single food product might not set off a
tidal wave of
discontent. But Mexico is different.
"When you talk about
Mexico, when
you talk about culture and societal roots, when you talk about the
economy,
you talk about the tortilla," said Lorenzo Mejía, president of a
tortilla
makers trade group. "Everything revolves around the tortilla."
The
ancient Mayans believed they were created by gods who mixed their blood with
ground corn. They called themselves "Children of the Corn," a phrase
Mexicans
still sometimes use to describe themselves.
Poor Mexicans get
more than 40
percent of their protein from tortillas, according to Amanda
Gálvez, a nutrition
expert at the National Autonomous University of Mexico.
Modern-day tortilla
makers such as Rosales use "an ancient and absolutely
wise" Mayan process called
"nixtamalizacion," Gálvez said.
The process is
straightforward. Large kernels
of white corn are mixed with powdered calcium
and boiled, then ground into a
dough with wheels made of volcanic
rock.
The resulting tortillas are more
pliable and more durable than
those typically found in U.S. stores. Mexicans say
tortillas are their
"spoons" because they use them to scoop up beans, and can
serve also as
their "plates" because they're sturdy enough to hold a pile of
braised meat
and vegetables.
The tortilla-making process, Gálvez said,
releases
antioxidants and niacin, which allows them to be absorbed by the body,
and
the membranes on each corn kernel provide important dietary fiber. As a
result of eating tortillas, Mexican children have a very low incidence of
rickets, a bone disease caused by calcium deficiency that is common in
developing countries.
"It is absolutely crucial for our population to
keep
eating tortillas," Gálvez said.
Gálvez said she believes the price
increase
is already steering Mexicans toward less nutritious foods. The
typical Mexican
family of four consumes about one kilo -- 2.2 pounds -- of
tortillas each day.
In some areas of Mexico, the price per kilo has risen
from 63 cents a year ago
to between $1.36 and $1.81 earlier this
month.
With a minimum wage of $4.60 a
day, Mexican families with one wage
earner have been faced in recent months with
the choice of having to spend
as much as a third of their income on tortillas --
or eating less or
switching to cheaper alternatives.
Many poor Mexicans,
Gálvez said, have
been substituting cheap instant noodles, which often sell for
as little as
27 cents a cup and are loaded with less nutritious starch and
sodium.
"In
the short term, the people who can buy food are going to get
fatter," she
said. "For the poor, the effect is going to be hunger."
There is
almost
universal consensus in Mexico that higher demand for ethanol is at the
root
of price increases for corn and tortillas.
Ethanol, which has become
more
popular as an alternative fuel in the United States and elsewhere because
of
high oil prices, is generally made with yellow corn. But the price of white
corn, which is used to make tortillas, is indexed in Mexico to the
international
price of yellow corn, said Puente, the Mexico City
economist.
A combination
of tortilla-maker organizations, farming groups
and members of the Mexican
Congress are clamoring for an investigation into
alleged monopolies, commodity
speculation and price fixing.
"It is
probable that monopolistic practices
played a role in the problem," Eduardo
Pérez Mota, head of Mexico's federal
competition commission, which
investigates anti-trust cases, said in an
interview. "In the recent past we
have detected collusion on prices by corn
buyers and by some tortilla
makers."
Some tortilla makers claim Cargill is
among those unfairly
raising prices, an allegation that Tamayo, the company's
spokeswoman, calls
"absolutely false."
Mexico's corn behemoth is Grupo Gruma,
owner of the
Maseca tortilla brand and the world's largest tortilla maker. Mota
said the
company may control as much as 80 percent of the Mexican tortilla flour
market. The company has already drawn his ire by allegedly buying a
competitor
without the competition commission's approval.
Mexico, which
counts corn as
one of its major agricultural products, now faces a shortage.
As part of
Calderón's plan to combat high tortilla costs, he gave emergency
approval -- as
suggested by large corn brokers -- to import more than
800,000 tons of corn from
the United States and other countries.
But just
the year before, Mexico was
exporting corn. The administration of Calderón's
predecessor, Vicente Fox,
allowed brokers to export 137,000 tons of corn,
which farming groups say should
have been warehoused for future
use.
Rafael Rodríguez, finance director of a
farming trade group, said
the contradictory decisions by the two presidents are
proof of government
favors to big corn companies.
"Instead of sanctioning
them," Rodríguez
said, "the government sat down with them and made deals."
No
one knows
for sure how many tortilla makers are in Mexico. Estimates range from
65,000
to 200,000.
Long a fixture of the Mexican street scene, tortilla
makers
in the past few months were suddenly being accused by their customers of
being the villains in the tortilla crisis.
As his prices rose, Salvador
León,
owner of the venerable El Mexicano tortilla shop in Nezahualcoyotl,
watched his
sales plummet.
"The customers just got mad at me," León said.
"I tried to
give an explanation, but they just went on in ignorance."
A
few miles away,
Rosales surveyed her shop, perplexed about how to cut
costs.
She pointed at a
stooped man struggling with a big ball of
tortilla dough.
"He's a senior
citizen, and those women over there," she
said, nodding toward the counter,
"they're single mothers. How can I fire
any of them?"
While she talked, a
73-year-old woman named María Neri
approached the counter. Neri has no pension
and no savings, but she gets a
few pesos each month from a nephew and a
daughter.
She lives just around
the corner from Rosales's tortilla shop and
has been buying two kilos a week
for years. On this day, even with the Mexican
government's new price
control, she could afford only one.

I may be right to be skeptical about this alternative fuel thing.

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