Duty-free Imports Repress Corn Planting in Mexico

Photo: Jesús Villaseca

La Jornada: Matilde Pérez U.

Translated by Monika Ayu

Corn production in Mexico will decline by 4.8 million tons as a result of the elimination of 7 percent of the 8 million hectares [19,768,430 acres] dedicated to growing the grain, the Food and Agriculture Organization of the United Nations (FAO) stated in its quarterly report on Food and Nutrition Security.

There is a recovery in grain production in Mexico, Central America, and the Caribbean, where production is estimated to exceed 41 million tons. However, the UN report continued, there will be a decline in corn production in Mexico.

SAGARPA [Mexico's Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food] is estimating that corn production will be 22.4 million tons, down from the 24.5 million tons harvested in 2008.

Alonso Campos Encines, president of the Corn Council of the State of Sinaloa, and Carlos Salazar Arriaga, a representative of National Confederation of Corn Producers of Mexico, noted that the decline in grain production is a result of drought, international price drop, the weakening of contract farming, and marketing problems.

Salazar Arriaga pointed out that last year's imports--the country received 9.5 million tons of grains last year, of which almost 2 millions were white corn--gave rise to marketing problems and disrupted inventories, especially that of white corn. Last year's production was 21 million tons, while domestic demand is 19.5 million tons.

Further, he said, there is a price drop in the price of corn on the grains exchange in Chicago. Crop expectations in Brazil and the United States have caused the price in the domestic free market to drop by 20 to 30 percent. Authorities should reduce imports and convince farmers to plant yellow corns on at least one million hectares [2,471,053 acres].

Campos Encines believed the estimation of the FAO

"is very close to reality. In Sinaloa they have already stopped producing 1.5 million tons of the 5 million tons normally produced in the state; as a result, we expect domestic prices to improve."

But the situation is detrimental. The price drop led to reduced revenues of a thousand pesos [USD$75] per ton from last year's production. Contract farming agreements failed because prices were based on the grain exchange in Chicago, where the price of white corn is 15 percent lower than that of the grain exchange in Kansas.

The negotiations with the state government and the (SAGARPA) have advanced, but the producers will be compensated with only 500 pesos [USD$37.50] per ton. This is why, he added, farmers continue to ask the federal government to eliminate the 2008 decree that allows imports of duty-free corn. It has not benefited either consumers or producers. Tortilla prices remain high. In Sinaloa they cost 14 pesos [USD$1.05] per kilo [2.2 lbs.], and farmers don't recover the costs of production. Spanish original