Hundreds of thousands of people marched through downtown Mexico City the last day of January protesting the rise in the price of tortillas and other staple foods. The march was filled with housewives beating pots and pans in the kind of “casarolazo” made famous by the resistance movements of Argentina. Supported by unions, farmers, and leftist groups, the march was initiated by the National Union of Workers (UNT), a federation of labor organizations independent of Mexico’s political parties, according to an article by John Ross in UE's invaluable web publication Mexican Labor News and Analysis.
Mexico’s “tortilla crisis” provides an all-too-vivid illustration of the way globalization, neoliberalism, and trade agreements like NAFTA actually affect the lives or ordinary people around the globe.
Tortillas form the staple of the Mexican diet, and are often the only food for the 13 million children who live in extreme poverty (less than $2 a day).
Last year Mexico had the largest corn harvest in its history – more than twice as much as in 1980. Yet the price of tortillas has doubled and in some regions tripled over the past few months.
The food inflation is a clear if unanticipated result of the policies imposed on Mexico by NAFTA and the on-going integration with the U.S. economy.
As Marie Kennedy and Chris Tilly explain in the Dollars and Sense blog,
“The structure of corn production has changed dramatically. Hundreds of thousands of family farmers in central and southern Mexico once dominated the crop; today, northern Mexican agribusiness calls the tune. That plus NAFTA and other free trade agreements and the reduction of government subsidies mean that Mexico’s corn price is now the world price.”
Farm employment in Mexico has fallen by 30% since NAFTA went into effect. According to a study by the International Relations Center, cited in Enrique C. Ochoa's article "The Costs of Rising Tortilla Prices in Mexico," the price Mexican farmers receive for their corn fell by half in the face of cheap, subsidized corn imports from the U.S.
Now the world price for corn has taken a sharp turn upwards, primarily as a result of an increase in demand for ethanol in the U.S. And so millions of Mexican children are starving.
Mexico’s integration into the global economy has made it hostage both to the gyrations of world markets and to the machinations of U.S.-based grain merchants like Cargill and globalizing Mexican tortilla producers like the GRUMA As a January 17 statement by Mexican Farmers Organizations put it, NAFTA and neoliberal policies have “totally exposed our country to the volatility and uncertainty of the agricultural international markets, highly dominated by the developed countries and by their gigantic food-processing corporations.”
And there is no end in sight. A clause in trade agreements would lift restrictions on imports of corn and beans starting in 2008.
The result of rising prices combined with a less than 2% increase in the legal minimum wage, has been a nearly 20% decline in “real” (inflation-corrected) wages for Mexican workers just since January 1.
President Felipe Calderon, recently elected in a disputed election, has been a strong advocate for “free markets.” The tortilla crisis, according to the AP, has put Calderon in “an uncomfortable position between the poor and some agribusiness industries hoping to profit off the surge in international corn prices.”
Calderon’s response might be described as “pseudo-regulatory.” He summoned the heads of several transnational corporations to sign an accord in which they voluntarily agreed to cap tortilla prices at 8 ½ pesos per kilogram (35 cents a pound) for three months – limiting their price increase to a mere 40%. But the agreement is being widely ignored. Federal government inspectors found prices over the cap at a majority of tortillerias visited nationwide. Calderon has also condemned speculation and authorized emergency imports of corn from the U.S.
Last year’s opposition presidential candidate Lopez Obrador has called for wages increases, food subsidies, fixed prices for basic foods, and cancellation of the end of restrictions on corn and bean imports scheduled for next year. The statement by Mexican Farmers Organizations goes further, proposing the exclusion of corn from NAFTA.
The tortilla crisis shows how closely seemingly disparate issues have become linked in the global economy. Food is linked to energy: The rising price of corn is intimately linked with the growing demand for biofuels and the rising cost of petroleum used for fertilizers and transportation (U.S. President George Bush’s proposal to address U.S. dependence on fossil fuels by increasing the use of biofuels promises to aggravate this problem in the future.) Economy is linked to environment: the biofuels boom sucks corn away from the food market; in response the Mexican government is considering legalization of genetically modified corn, even though it is unable to ensure even the level of safety precautions advocated by the GM companies. The position of farmers and other rural people is linked to that of workers and other urban residents: The 30 percent of farm workers pushed off the land have swelled cities and their workforces, creating mass unemployment and underemployment and driving down wages.
The result of these interconnections is that changes in one kind of market richocet to affect many other aspects of life. Unregulated markets are leading to devastating unintended consequences.
Nowhere is this more apparent than on the issue of immigration. Mexico’s farm crisis has driven millions of Mexicans to come to the U.S. in recent years, and food inflation is likely to swell that number, no matter how much the U.S. militarizes the border. Ben Berkowitz, business news editor at AOL, says “Tack a few more pesos on a kilo of tortillas and you’re going to see a lot more people trying to find a better like in America.” Indeed, ending NAFTA and making it possible for Mexico and other Latin American countries create viable economic conditions for their peoples is a key – though almost entirely neglected -- element of any real strategy for immigration reform in the U.S.
Interestingly, the organizers of the Mexico City protest declined to let former opposition presidential candidate Lopez Obrador speak at the main demonstration, relegating him to his own post-rally gathering. As one participating corn farmer put it, “This is a spontaneous people’s movement, with no political affiliation. Lopez Obrador can participate, but he should not head the march.”
The tortilla demonstrations, and the wider Mexican social movement of which they are part, follow a pattern that can be seen in many countries around the world in response to neoliberalism and globalization – and the frequent subservience of even opposition parties to them. Alliances of unions and other popular organizations serve as policy advocates, exerting pressure on those within both the executive and the legislature, but from a position that remains independent from both governing and opposition political parties. Perhaps by sharing and analyzing the experiences of this kind of action, people in different countries can learn something from each other about how they work.
Y.R.
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