Friday, January 12, 2007

Ethanol Versus Tortillas


BBC reports that Mexico's new president, Felipe Calderon, is being confronted with a crisis - the spiralling cost of tortillas.

"When there isn't enough money to buy meat, you do without," one woman in Mexico City, Bonifacia Ysidro, told the Associated press. "Tortillas you can't do without."

Ms Ysidro said she paid 25 pesos - about a sixth of her family's daily income - for enough tortillas to feed her family of six.

The problem is sufficiently serious that Calderon has vowed to look into it and find some solutions, at least if there are any that don't involve government subsidies of corn.

Since the 1994 Free Trade deal, Mexico has had access to cheap (heavily subsidized) US corn but availability has been dwindling as more American corn is diverted to ethanol production.

The tortilla dilemma may seem minor, perhaps even frivolous, but it's not. The American emphasis on ethanol as an alternative fuel puts real pressure on the US corn production, even as some corn-growing regions begin to experience groundwater exhaustion.

The amount of corn needed to for one fillup of an SUV gas tank is enough to feed a man for a full year.

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