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Gov’t targets tortilla prices
By Kelly Arthur Garrett/The Herald Mexico
El Universal

Viernes 12 de enero de 2007

Facing widespread consumer anger six weeks into his term, President Calderón on Thursday said he is taking measures to brake soaring tortilla prices

Facing widespread consumer anger six weeks into his term, President Calderón on Thursday said he is taking measures to brake soaring tortilla prices.

The millennia-old staple, which cost less than 6 pesos per kilo a year ago, has passed the 10-peso mark in much of the country, with some paying 15 pesos and more in certain areas.

But the president´s plans, which don´t include price controls or subsidies, won´t be enough to satisfy the opposition forces, who said Thursday they are organizing a nationwide mobilization later this month to call attention to the "national security issue" of rising food prices combined with stagnant wages.

Calderón´s strategy will focus on increasing the corn supply by expanding import quotas on the white corn from which tortillas are made. He also said he has instructed Economy Secretary Eduardo Sojo and Antonio Morales, director of the federal consumer protection agency (Profeco) "to be very alert and apply the full weight of the law to prevent any speculation or gouging carried out at the cost of human hunger."

Earlier Thursday, Guillermo Ortiz, who heads Banco de México, the nation´s independent central bank, blamed the recent high prices on speculators who buy and then resell corn before it gets to the tortilla producers. White corn prices have gone up, he said, but not enough to justify the current tortilla prices.

Calderón, speaking in Veracruz, also said Social Development Secretary Beatriz Zavala is under instructions to keep the cost of government corn distributed to the poorest sectors through the Conasupo program low enough to allow tortillas to be made and sold as inexpensively as possible.

Those three measures, he said, are appropriate government responses to the problem.

"The government cannot decide the price of these products," said the president, a member of the National Action Party (PAN) and a strong free-market advocate. "But that will be no excuse for us not to act to protect those who have the least."

The administration appears to be on a collision course with the Democratic Revolution Party (PRD), the largest opposition force, over the import strategy. The PRD, in favor of "nutritional sovereignty," has already been a critic of existing corn imports, which are mostly limited to the yellow corn used for animal feed, and of corn and bean trade liberalization planned for 2008.

"This country cannot depend on the corn production of foreign nations," said Javier González Garza, coordinator of PRD deputies in Congress.

The PRD is in a coalition of political parties, labor unions and social organizations known as the Broad Progressive Front, or FAP. Citing the tortilla crisis as just the latest episode in a decades-old slide in food purchasing power, the FAP said a "major mobilization" of labor and farm worker organizations will seek to put pressure on Congress and the Calderón administration to take stronger action, including significant wage hikes.

"The response (to rising food prices) has already been developing across the nation," said Jesús Ortega, a former PRD senator and now the FAP´s national coordinator. "What this government of the right needs to see is a big reaction from progressive organizations."

At its news conference Thursday, the FAP was unclear on what form the "mobilization" would take, as well as what specific measures, besides a general wage increase, the Calderón administration should take.

But PRD leaders joined with the Institutional Revolutionary Party (PRI) Thursday in demanding that the administration put pressure on sectors involved in tortilla production, including corn product manufacturers such as Maseca and Cargill, to take steps to get the price down.



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