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US demand for corn to make ethanol has forced Mexico to extend price supports so that the price of tortillas, a staple of the Mexican diet, doesn't again go through the roof.  Put simply, US energy policy is threatening Mexico's poorest people with hunger.

Yesterday, the Mexican government extended price supports on tortillas.  According to a Reuters report onCNN

Mexico's government renewed a deal with retailers and producers Wednesday to cap prices of the food staple tortilla to control inflation and placate angry consumers.

Prices for corn, the main ingredient in tortillas, surged in December and January to their highest in a decade because of increased demand for the grain from U.S. ethanol fuel producers.

Many retailers agreed to keep tortilla prices at 8.50 pesos ($0.77) per kilogram, with key producers committing to hold the price of corn flour at 5 pesos per kilogram, Economy Minister Eduardo Sojo told reporters.

Wednesday's deal extended an accord from January that helped stymie an inflation spike but was set to expire on April 30.

Mexico is widely considered the birthplace of corn, but it imports millions of tons from the United States every year. Most Mexicans eat tortillas on a daily basis.

Isn't this wonderful?  A staple of the Mexican diet, the food available to Mexico's poorest people, is on price supports because of US demand for corn to make ethanol.  The end of the pressure from US demand is nowhere in sight. Are we ready to discuss US energy policy and its impact on this hemisphere?

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On February 1, 2007, the Washington Post reported:

About 75,000 trade unionists, farmers and leftists marched through downtown Mexico City on Wednesday to protest price increases for basic foods like tortillas the staple of Mexico's poor and to demand a change in economic policy.

The march represented a challenge to President Felipe Calderon's market-oriented policies and one banner read "Calderon stole the elections, and now he's stealing the tortillas!" Others waved handfuls of the flat corn disks and chanted "Tortillas si, Pan no!" a play on the initials of Calderon's National Action Party, the PAN, which also means "bread" in Spanish.

Some context.  Mexico has tens of thousands of people living in extreme poverty, which is defined as less than $2 per day in income.  For these people, the price of tortillas is a matter of eating or hunger.  

The events in late January and early February were essentially beneath the radar in the US.  Was this because of historical lack of concern about events south of the Big River?  Was it because US media relegate stories about the consequences of US energy profligacy to the back pages?  The Washington Post reported in January

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 (snip).

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.

Of course, you'll have to forgive the WaPo for claiming that the "outsize dependence" was Mexican and that it was for tortillas, rather than American and for energy.  That's what you get too frequently in the US for reportage about Latin America.

So, you're asking if you read this far, what's this got to do with anything?  It's this: the consequences of US energy policy are gigantic, not only in terms of global warming and the wars the US continually fights, but this policy also has immediate, direct consequences on the poor of this hemisphere.  If we care about these consequences, and we really should, we need to be addressing this issue in the upcoming elections.

Originally posted to davidseth on Thu Apr 26, 2007 at 06:44 PM PDT.

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Comment Preferences

  •  how? (2+ / 0-)
    Recommended by:
    debedb, Shane Hensinger

    people cry for ethanol because "hydrocarbons" are destroying the world.  So when we push ethanol (from corn) someone like you cries about the price of tortillas.  How do we solve this tortilla issue in the next election?  Could you give us an actual platform?

    Look, the reality is the laws of supply and demand work pretty well.  There is a spike in demand for corn because of ethanol.  The result will be an increase in the supply of corn.  If governments around the world are going to pay ABOVE market prices for corn because of ethanol, then the price of tortillas WILL increase.  Why would a farmer sell his corn for X -1 for tortillas when he can sell them for x to the government?

    I doubt any presidential candidate can solve this issue.  Either farmers will plant more corn or Mexicans will try out flour tortillas.  I think flour tortillas are great, but the solution is the market, get the government out of it.

  •  Thank you for this diary! (6+ / 0-)

    I actually had a draft on this topic, but your diary is better.

    And yes, no one makes the connection between their gas guzzlers and tortillas (hunger, plain and simple.)
    And in Brazil, thousands of acres of rain forests are being destroyed for ethanol.

    If the Republicans will stop telling lies about the Democrats, we will stop telling the truth about them.--Adlai E. Stevenson

    by vassmer on Thu Apr 26, 2007 at 06:54:19 PM PDT

    •  could not agree less (2+ / 0-)
      Recommended by:
      debedb, Shane Hensinger

      this diary offers no solutions at all.  The diary says we should "solve this" in the next election, but how should we do this?  YOu want a cold hard idea?  The government of MEXICO should plant more corn or offer subsidies, it is not America's job to solve problems in Mexico.

      Every third diary on this site is about global warming, so now ethanol is evil?  ok, so it is now Bush's favorite, switchgrass I guess.  

      •  It does not say solve this. (7+ / 0-)

        It says

        If we care about these consequences, and we really should, we need to be addressing this issue in the upcoming elections.

        Addressing it, to me, means that we discuss the alternatives, and we recognize that supply and demand might balance the books on the stomachs of poor people.

        •  ok, fine (2+ / 0-)
          Recommended by:
          debedb, Shane Hensinger

          i guess we can say "discuss this in the future".  I guess that is worthwhile.  I am a pragmatic person with little patience, I admit it.  I favor posts with ideas, that is just my way.

          •  Wage Insurance (0+ / 0-)

            A bit off topic, but I'm curious, TurtleCreek, given your opposition to govt. intervention, how do you feel about wage insurance, which The Hamilton Project has proposed?

            I hear that Obama is working with Rubin, and will soon unveil it as a cornerstone of his economic program.

            Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

            by PatriciaVa on Thu Apr 26, 2007 at 08:36:17 PM PDT

            [ Parent ]

            •  well I will answer (0+ / 0-)

              before I get banned by people who disagree that the Mexican government is corrupt and many Mexicans choose to move to the USA lol!

              First of all, I think "wage insurance" is a great idea that should be offered by insurance companies if it is economically feasible.

              as a government program, I am less enthusiastic about "wage insurance"  I will say this, I could support it if it made long term sense.  I understand that the much defamed here "globalization" can cause disruptions.  However, historically, and i mean including the 2000s, Americans who lose their jobs usually get higher paying jobs in replacement.

              I agree that many people need to be re-trained and placed in new jobs.  I do not neccessarily think government is the best to do this, but i do think someone will offer this service.

              traditionally, economic changes are fast and disruptive, they change with a bang.  The skills people offer will change when the economy changes its demands and people change their skills to take advantage.

              personally I think they idea that government should pay to retrain workers is outdated.  There are simply too many ways to make money and succeed in America.  Last I checked there were over 1 million small businesses in this country.  It is a far cry from the days of "labor" and "management".  Even if many politicos do not want to move on.

              Again, I support wage insurance if it is market based.  And I even support the government offering incentives for workers to retrain for critical jobs.  But the idea that the American tax payer should pay anyone who changes jobs and makes less money is a non starter with me.

              •  You won't get banned becuase of your opinion (3+ / 0-)
                Recommended by:
                Ahianne, vcmvo2, la urracca

                Your opinion is shared by others here.

                You will get banned because you're a dick.

                Reality is that which, when you stop believing in it, doesn't go away." - Philip K. Dick

                by God loves goats on Thu Apr 26, 2007 at 09:15:02 PM PDT

                [ Parent ]

              •  The Power of Government (1+ / 0-)
                Recommended by:
                la urracca

                Well, TurkeyCreek, I disagree.

                I realize that we can't unilaterally extract ourselves from the global community, as it would harm our economic growth.  Therefore, it is govt. role to mitigate the impact of globalization on lower- and middle-class Americans.

                A high school grad making US$ 25 dollars an hour at a Whirlpool factory in the Midwest shoudln't have to endure a sig. decrease in earnings when Whirlpool decides to move operations overseas.

                Look at what the Hamilton Project is doing with wage insurance.  They are also coming to the realization that the middle-class should not have to undergo the massive disruptions brought on by globalization.  Wage insurance will mitigate it, and render it more palatable.

                TurkeyCreek, like President Clinton and Robert Rubin, I believe in the power of government to accomplish great things.  

                As for who should pay for it, not the lower or middle-classes (HH making less than 400K a year).  They pay more than their fair share.

                Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

                by PatriciaVa on Thu Apr 26, 2007 at 09:20:38 PM PDT

                [ Parent ]

                •  what it comes down to is you (0+ / 0-)

                  seem to have a lot of faith in government and I do not.  my lack of faith is based on personal experience and the study of history.  However, I do think there can be stop gap measures to protect those with real skills, certainly they are they least of our problems.

                  •  The Vision of President Roosevelt (2+ / 0-)
                    Recommended by:
                    mariachi mama, la urracca

                    TurkeyCreek, govt, of course, is not perfect.  But it is FAR preferable to laissez-faire economics.

                    I believe that President Roosevelt's safety net made our country great.  Prior to his social and economic programs, America didn't really have a thriving middle-class.

                    It was Roosevelt's vision that enabled our country's most precious resource, it people, to contribute to the greatest nation on Earth.

                    Thanks to the programs Roosevelt initiated, my parents were able to cross the Rio Grande and settle in a country that enabled their four children to attend top universities and become contributing member of this society.

                    That's why I'm a Democrat.  I believe that social and economic programs, however wasteful, are preferable to the alternative.

                    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

                    by PatriciaVa on Thu Apr 26, 2007 at 09:42:20 PM PDT

                    [ Parent ]

                    •  teddy or Franklin? lol (0+ / 0-)

                      just kidding.

                      I appreciate your opinion.  There have been times when government has done good.  I am not a purist or idealist who can not compromise or allow for alternatives.  

                      Personally, I think America is great because government stays out of much of our lives.  I think America has become so powerfull and such a magnet to others because of less government interference, not more.  Also, I will respectfully disagree with you that FDR created the middle class.  In fact, prior to the American revolution, most citizens were middle class farmers.

                      The situation is this.  America is a beacon to the world, this was true 30 years ago and is still true today.  But you can glean from many comments here that the USA is not a beacon but a malignancy.  In this thread alone I have been troll rated for saying Mexicans have come here in droves.

                      one think we will agree on, FDR loved America and thought it was the greatest place on earth.  I agree with him there.

              •  Are you a Republican? (1+ / 0-)
                Recommended by:
                la urracca

                Based on your posts on this diary, I have to believe that you're a Republican.  If you're a Democrat, you believe in the power of govt.  If you're a GOPer, you believe that the market solves everything.

                Indeed, your arguments sound as if they could have come from Snow, during his spat with Rubin last year.

                http://blogs.wsj.com/...

                April 12, 2006, 5:26 pm
                Take That Bob Rubin!

                Treasury Secretary John Snow, speaking today at the University of Mississippi, targets predecessor Bob Rubin’s effort to come up with Democratic alternatives to the Bush administration’s economic policies.

                "On the one hand are those who believe that the future of our economy is best served by a larger role for government in the economy," Snow said. " On the other side are those, like myself, who maintain that while the role of government is to create the conditions for prosperity, the citizens and taxpayers are the best judge of how to spend their own money, not the government. One view necessitates higher taxes, a more expansive role for government, and more government spending. The other holds that low tax rates, a reduced role for government and a vibrant private sector is the best path to prosperity for all Americans."

                Making clear precisely who he was targeting, Snow needled Rubin, former deputy Treasury secretary Roger Altman and other former Clinton officials for styling their new effort the Hamilton Project, after the nation’s first Treasury secretary. "Based on what was said, it appears that Hamilton’s name may have been misappropriated. Hamilton after all was foremost among the founding fathers in seeing that the new republic’s future depended upon the vitality of commerce and the private sector while the authors of the Hamilton Project argue for a larger government role."

                Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

                by PatriciaVa on Thu Apr 26, 2007 at 09:34:35 PM PDT

                [ Parent ]

      •  it is... (1+ / 0-)
        Recommended by:
        la urracca

        it is not America's job to solve problems in Mexico.

        ...if America is creating the problem...

        "Immigration is the sincerest form of flattery." ---Jack Paar

        by bic momma on Thu Apr 26, 2007 at 08:49:32 PM PDT

        [ Parent ]

  •  I don't understand (1+ / 0-)
    Recommended by:
    TurkeyCreek

    For these people, the price of tortillas is a matter of eating or hunger.

    Are tortillas the only thing on offer for poor people in Mexico?  There is no alternative?  No beans?  No rice?  No wheat flour?  Will they truly starve to death without tortillas and only tortillas?

    My parents grew up poor in the south.  The only groceries they can remember their parents buying at a store were flour, pinto beans, corn meal and coffee (everything else they ate came from the land and/or the animals they raised). If one of those items was prohibitively expensive, they did without it until the price came down.  And no one starved to death.

    I wish there were enough cheap corn for tortillas and ethanol.  And I do agree that we need to address our energy problems long term, not just for environmental reasons but national security reasons.  But ethanol is the only thing I can think of that can - right now - immediately curb our dependence on foreign oil.  Can it be made from something other than corn?  I'm sure it can.  But again, we're discussing right now.

    The price of tortillas in Mexico is an unfortunate by-product of our increasing demand.  However, the events in Iraq are an unfortunate by-product for our demand for petroleum.  

  •  Southern Africa (5+ / 0-)

    In much of southern Africa corn or maize in the form of "mealie meal" is a staple of the diet:

    The dish made from maize varies in name and in thickness depending on where you go. In Malawi for instance, the nshima tends to be quite soft, especially if prepared from refined mealie meal. Malawians say that sadza - from Zimbabwe - tastes like concrete. From the Zimbabwean viewpoint, the Malawian nshima is like porridge. Zambians are happy with something in between.

    Coming from a country that does not really have a truly national dish, it is difficult to fathom just how important this resource really is. Wars have been started over nshima and Zambians have named their children after the stuff. If someone were to ask a Zambian what it was that had built Zambia to what it is today, then I would wage my own weight in mealie meal that the answer would be nshima.

    http://www.bbc.co.uk/...

    The USA has traditionally used excess corn production as food aid, with the levels of aid reflecting the excess production rather than need. Long term the rise might be a good thing in that the "aid" had driven down the price of the domestically produced crop and put smallholders out of business, further driving down supplies. In the short term, the current shortages, especially in Zimbabwe, will cause starvation in some countries.

    Kneejerk reactions do not come from knees.

    by londonbear on Thu Apr 26, 2007 at 06:59:15 PM PDT

  •  Nice diary (4+ / 0-)

    I don't think that ethanol is the panacea to our energy crunch in the same way that it helped Brazil, which uses sugar cane.

    Most of our corn output is used as animal feed. It's a very inefficient use for food production. A plant-based diet would free up resources for other uses, like ethanol, if so we chose. It would be healthier for us as well.

    Don't get me wrong: I love meat. but we will need to re-evaluate the way we use resources in the future, we don't have the available land.

  •  This is important. And I also don't know (10+ / 0-)

    what the answer is...but I DO know that corn is life itself, in rural - and especially Indian- Mexico,

    How important is it? Well, for many people, a meal is tortills and salt. That's it.

    Perhaps you think I exaggerate...not at all. I have seen many people, many times, have nothing else for a meal.

    Why not wheat? Because wheat takes more water...and wheat is expensive. And wheat is not as nourishing...

    Please remember that the traditional "three sisters" agriculture, corns, beans and rice ( milpa agriculture, used all over the Americas), was what people can / could grow on poor land . Those three grown together re-enrich the soil...it is quite magical. That's what poor people eat.

    If corn goes up much more, poor people in Mexico will starve.

    And I am a little surprised at the lack of compassion of some...

    Thank you , davidseth...I , too was working on a diary on this. It is, I say again, important.

    •  Yes--It Strikes Me There is a Lot of Speculating (3+ / 0-)

      about matters of fact.

      The phrase "every country is 3 meals away from revolution" comes to mind.

      At the moment we're importing millions of these people.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Thu Apr 26, 2007 at 07:34:46 PM PDT

      [ Parent ]

    •  Up here it's corn beans squash (2+ / 0-)
      Recommended by:
      la urracca, AshesAllFallDown

      ... that are considered the 3 sisters of life. Wild rice I think is the only rice native to the Americas and maybe wild oats?  There's also quinoa grain which looks like the kind of little millet seeds that parakeets eat.

      But yes you need to have corn in there to balance the beans/rice/squash to get the full spectrum of amino acids to complete the proteins so the human body is fully nourished. Also animals need more than one kind of grain ideally.  THAT is why it is so important and why eating just flour tortillas won't do.

      •  And down there, too...I miss - wrote rice.... (0+ / 0-)

        In my other comments I talk about corns, beans and squash ( ...embarassing mistake....).

        There is quite a bit of rice used where I am ,if people can afford it...but it sure isn't grown there!  

        I am pretty sure that it is the same all through the Americas, at least where the climate supports it. Of course in places like the Andes, it is a potato based diet, with a coca assist.

        Mexico had/has amaranth, which is high in protein, but the Spanish did their best to stamp it out.

        Quinoa is South America..but there is interest in it in Mexico..such a fabulous grain! It does need a
        certain altitude to grow, I do believe.

        I am also in New Mexico, for part of most years, and I see so clearly the ancient links between the two countries.

  •  One thing overlooked here...... (8+ / 0-)

    or not known by many of the commenters.  Corn and beans when eaten together are a complete protein by the supply of amino acids from each.  If you substitute flour tortillias you seriously degrade the quality of the simple diet and cause nutritional deficiencies.  

    You make a living by what you get and a life by what you give. W. Churchill

    by Cronesense on Thu Apr 26, 2007 at 07:34:47 PM PDT

    •  Exactly. Corns, bean, and squash ( see (1+ / 0-)
      Recommended by:
      Cronesense

      my comment above), supply most nutritional needs, and, grown together, re-enrich the soil.

      Native people of the Americas have used this combination for...who know how long.

      There is a fascinating chapter about it in a very good book, 1491..can't remember the author, sorry.

      Native peoples who suddenly change to a "modern " diet, are highly suseptible to diabetes, among other things.

        •  david...... (4+ / 0-)

          have you read "Five Families"  by Oscar Lewis?  I read this book back in the mid-sixties and have never forgotten its power. It sparked my interest in Anthropology.  
          Here is an online review from Amazon written by Lawyeraau:

          I first read this book many years ago, along with some of the author's other works, and decided to take read it again. Time certainly has not diminished the power of the author, winner of the 1967 National Book Award for his book, "La Vida", to take the reader into the lives of others. This is an anthropological work that reads as if it were a riveting novel, so fascinating is its subject matter.

          The author takes the reader into the lives of five different Mexican families for one entire day, so that the reader can see how it is that they live their lives. The families are both rural and urban and represent a cross-section of Mexico at the time that this book was written. All but one of the families portrayed are poor, yet they all share some similar characteristics.

          Written during the nineteen fifties, this book is, for the most part, a look at a culture of poverty. It is also a look at a culture that is in transition, shifting from rural to urban with its often resulting poverty and pathology. Yet, it is also a culture into which, North American material comforts and influence were making inroads. That then nascent influence is often reflected in even the poorest of the families laid bare here.

          The author basically gives the reader a typical day in the lives of each of these families. It is an intimate, objective look that creates a fascinating family portrait. It is a totally engrossing work of not only anthropological import but of historical value, as well. The author has managed to freeze in time a segment of Mexican life during the nineteen fifties. Who would have thought that reading about people shopping, preparing meals, and talking about their relationships would prove to be so fascinating?

          Those who are interested in other cultures, as well as the way people live their lives, will really enjoy this book. The author provides a fascinating, freeze-frame glimpse into the lives of others. I simply loved this book. Bravo!

          That review covers exactly what I remember about the book.

          You make a living by what you get and a life by what you give. W. Churchill

          by Cronesense on Thu Apr 26, 2007 at 07:54:53 PM PDT

          [ Parent ]

      •  And chiles (4+ / 0-)

        loaded with vitamins and other good stuff

    •  Oops should have read down further, yes n't (1+ / 0-)
      Recommended by:
      la urracca
  •  In your face bush-rove mob rule.. (0+ / 0-)

    Justice Dept. withholds prosecutor memos..The new documents were released on the eve of closed-door congressional testimony by Deputy Attorney General Paul McNulty on Friday. Documents listed as not being released were all authored by Kyle Sampson, Gonzales' former chief of staff, who resigned March 12 over the handling of the firings.

    WTF ! What is it going to take to rid ourselves of. Hope Gravel brings up using the RICO statutes against these criminals..

    "Better a little late, than a little never"..Oscar Madison

    by Johnny Rapture on Thu Apr 26, 2007 at 07:37:41 PM PDT

  •  Sorry but (0+ / 0-)

    this is not an American problem.  This is a Mexican problem.  The 25 ruling families in Mexico know damn well they'd better keep their "peasants" supplied with cheap tortillas.  They can if they want to.  This is not the U.S.'s fault, or the U.S.'s problem.

    The disgustingly wealthy 25 families that run Mexico need to fix this, not us.

    •  No. This is all of our problem. (5+ / 0-)

      U.S policies are part of the problem..a big part.
      Mexico of course bears blame, too.

      But to my way of thinking, it is time for us to see beyond borders, beyond countries.

      We are one continent, with shared problems. Isn't it time - past time- that we work together for the common good?

      To step beyond patriotism , and racism, and all the isms...and see people?

      We are more alike that we are different..everywhere.

    •  FWIW (4+ / 0-)
      Recommended by:
      als10, trashablanca, KenBee, la urracca

      this is not an American problem.

      "American" should refer to all those who live in the two continents of this hemisphere, North and South America.  So in the fullest sense, this is an American problem.

      Beyond that, I doubt strenuously that you could establish that it was SOLELY Mexico's 25 richest families who created the problem, and thereby give US policy a full pass on this.  

    •  Blame on speculation (0+ / 0-)

      There is considerable blame to be placed on speculation and monopoly practices.  The Mexican elite deserve quite a lot of blame as well.  But our appetite for corn ethanol is rising the price of corn.  Perhaps Bush's support of cellulosic ethanol has much to recommend it.  

       

      Dems in 2008: An embarassment of riches. Repubs in 2008: Embarassments.

      by Yamaneko2 on Thu Apr 26, 2007 at 08:40:35 PM PDT

      [ Parent ]

    •  Really? (1+ / 0-)
      Recommended by:
      la urracca

      What about other countries in need besides Mexico?  

      Bears everywhere shitting in woods

      by als10 on Thu Apr 26, 2007 at 09:03:42 PM PDT

      [ Parent ]

  •  It's not just about ethanol, (1+ / 0-)
    Recommended by:
    la urracca

    I believe it's as much about our ag policies and artificially low corn prices, which have driven Mexican corn farms out of competition.  And NAFTA has facilitated the flow of cheap US corn into Mexico for over a decade.  Increasing demands for ethanol are yet another blow to tortilla prices.

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