Frontier Former Editor

January 28, 2007

Now if my econ instructors had pulled out case studies like this . . .

Filed under: Uncategorized — Frontier Former Editor @ 3:33 pm

Now this is the kind of stuff they ought to be teaching in high school history and economics here instead of that crappy ‘cooperative education’ where students go out and work in local clothing stores and supermarkets . . .

A Culinary and Cultural Staple in Crisis
Mexico Grapples With Soaring Prices for Corn — and Tortillas
By Manuel Roig-Franzia
Washington Post Foreign Service
Saturday, 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.

more . . . .

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