Battle escalates over cheap USA corn in Mexico
Battle escalates over cheap U.S. corn popping into Mexico
Posted 8/8/2006 10:26 PM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this
By Sara Miller Llana, USA TODAY
PUEBLA STATE, Mexico — Corn plays an important role in ancient Mexican mythology. The Aztecs revered a corn god named Centeotl; the Mayans believed man's flesh was formed from corn dough.
But these days, the crop that is still the centerpiece of the Mexican diet is fueling a clash between Mexico and the United States as cheap American corn has inundated Mexican farms and marketplaces under the North America Free Trade Agreement (NAFTA).
"They should not send their corn here. They can send it somewhere else," says farmer Luis Damaso, tending his milpa, or corn patch, outside the town of Santa Ana Xalmimilulco in the central state of Puebla. "No one will pay for (our corn) now."
The politics of corn continue to escalate, as a 2008 NAFTA deadline looms for Mexico to scrap its corn and bean import tariffs. And the disputed July 2 presidential election here has only heightened those tensions.
On the campaign trail, runner-up Andrés Manuel López Obrador said he would renegotiate NAFTA provisions to protect the nation's corn and bean farmers. Now, Obrador is leading mass protests for a full, vote-by-vote recount of the election he lost by 0.6 of a percentage point.
He has put NAFTA supporters on the defensive and raised the hopes of farmers across the country, many of whom have rallied around Obrador and promise a long, hard fight ahead if rival Felipe Calderón, a staunch supporter of NAFTA, is certified as president. That decision is in the hands of an electoral court, which has until Sept. 6 to rule.
"(Corn in Mexico) is one of the areas that has the potential to become extremely explosive," says Jon Huenemann, a former assistant U.S. trade representative who helped negotiate many agricultural provisions under NAFTA. "U.S.-Mexican trade is huge and getting bigger and more significant to producers and consumers. And yet, for the same reason, the sensitivities are getting potentially more complicated. ... It's a bit of a tinderbox."
The USA is the largest corn producer in the world, exporting 18% of its crop. In the 2004-05 season, U.S. corn growers shipped 231 million bushels to Mexico, its second-largest customer after Japan, with a price tag of about $462 million, says Jon Doggett, vice president of public policy at the National Corn Growers Association. Most of the corn exported from the USA is yellow corn used to feed livestock, not the white corn that Mexicans traditionally consume.
"I don't think we are a threat to the Mexican farmer who is raising white corn," Doggett says.
But critics of NAFTA disagree. They say the flow into Mexico of American corn, sold 15% to 20% cheaper than the cost to produce it in the USA, is lowering the price of all corn, displacing farmers and eroding a way of life. Victor Suarez, a congressman for Obrador's Democratic Revolution Party who helped organize a mass protest of farmers in 2003, says nearly a million farmers have been displaced since NAFTA went into effect in 1994. He says their only recourse is to head north along the border or into the USA.
Damaso says he used to sell corn from his family's 1.2-acre milpa to his local tortilla-maker, but the price of corn has dropped while the prices for fertilizer and diesel have gone up. He says it is no longer worth it. "You can't break even anymore," he says.
Now he tends the field for family consumption, while the rest of the family has looked for work elsewhere: A few siblings are in New York, while others work in a textile factory. He recently returned home after three years working in Brooklyn.
But many say Mexico is better off with cheaper U.S. corn. For Jorge Gonzalez, a professor of economics at Trinity University in San Antonio, not complying with corn provisions under NAFTA "would imply that the price for corn, and therefore tortillas, would increase for everyone," he says. "They would be protecting domestic farmers but hurting everyone else."
Some farmers agree. Just a few miles from Damaso's plot, Fredy Alvarez Cortez prepared soil for the white, red and blue corn he cultivates and sells. Yet for the yellow corn that feeds his family's 25 cows, he buys U.S. imports. Like many farmers in the area, he knows little about the provisions under NAFTA, but he knows his budget. "It's more economical for us now," he says.
That could change. Corn prices in the USA have been rising as demand increases for ethanol, generally made from corn.
Even if Obrador does win, he does not have the authority to renegotiate NAFTA provisions unilaterally. If Mexico were to not honor its obligations, the U.S. could enter a dispute under NAFTA or retaliate by not honoring other provisions, such as slapping limits on the Mexican avocado industry, which has flourished under NAFTA.
Still, farm groups say they plan on fighting for the renegotiations promised by Obrador.
Suarez says if his group's demands are not met, they will not go away quietly: "There will be more demonstrations, and stronger demonstrations."
Posted 8/8/2006 10:26 PM ET
