100,000 farmers stage protest in Mexico City over end of corn tariff

In Mexico, as many as 100,000 farmers took to the streets in Mexico City to protest the end of corn tariffs, saying that the United States would put Mexican corn out of business. On January 1, tariffs on sugar, milk, beans and corn were eliminated under the NAFTA agreement. The US sugar industry and Mexican corn industry are considered to face the greatest risk from this round of tariff eliminations. Last year, food riots erupted in Mexico over the rising price of white corn, which is produced primarily by Mexican producers for the domestic market. Last year’s protests in Mexico sparked the “food vs. fuel” debate over ethanol.

Last year, President Calderon vetoed the Mexican biofuels bill, saying that it places too much emphasis on corn and sugarcane feedstocks. Mexico has been the subject of protects over the rising price of sweet white corn and the resulting impact on tortilla prices. The President called for a bill that placed more emphasis on algae and cellulosic biofuels. The President also said that the Ministry of Energy should be responsible for fuel production, transportation and marketing, instead of the Ministry of Agriculture.

The Mexican corn crisis was Myth #1 in Biofuels Digest’s “Food vs Fuel and the Jihad against Biofuels”

Myth #1: Biofuel demand in the United States for corn is taking corn away from starving Mexican children by causing a rapid rise in tortilla prices of between 50% and 100%.

Fact: It has been widely reported that ethanol is made from yellow (“field” or “cattle”), corn, while Mexican tortillas are made primarily from white corn. US corn exports supply only 14% of white corn consumed in Mexico. The rest is produced domestically by Mexico, which does not sell corn to ethanol producers.

Since 1993, the Mexican population has risen by 19%, and domestic Mexican corn production has grown 18%. However, Mexican corn consumption has risen 57% in the same period. Hence the rise in tortilla prices.

Oil prices have risen 129% since 2005, which factor into transportation cost, energy costs for manufacturing, harvest costs (combines), wage costs for employees (using transportation), packaging costs (plastics), and cultivation costs (fertilizers).

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