Tortilla turmoil

The fire under the open stove crackles as Catalina Mendez prepares dozens of the handmade corn tortillas she sells every day. Her tiny business has barely broken even, she says, since the recent US demand for ethanol biofuel made from corn – what we call maize — began pushing up the price of the local corn.

“Not that I would stop now, even if I was making nothing,” the 69-year-old says, slipping in and out of Nahuatl, the language spoken by the Aztecs. “Making tortillas is in my blood.”

A symbol of national unity, corn is king in Mexico. But for how long?

The first shudders came at the beginning of the year, when president George W Bush told America he wanted to produce 35 billion gallons (over 130 billion litres) of renewable fuels by 2017. As the price of corn futures on the Chicago stock exchange went up sharply, so did the price of tortillas at the hole-in-the-wall shops in barrios across Mexico.

The shock of paying 50% more overnight for Mexico’s staple food sent thousands of people on to the capital’s streets. The government hesitated, but by February had negotiated a price freeze that is still in force today. An aura of vulnerability has hung over corn in Mexico ever since.

At a recent press conference, the upbeat minister of agriculture, Alberto Cárdenas , attempted to dispel the disquiet. Mexican agribusinesses had responded by growing one million more hectares of corn, and Cárdenas waved statistics indicating a 12% increase in the all-important summer harvest in the northern state of Sinaloa, where three quarters of national production is concentrated. “Supply is guaranteed,” the minister declared. “This country has more corn today and that will happen every year until the end of this government."

But questions remain. The additional one million hectares growing corn means one million fewer hectares available to produce other crops. Because fewer beans — the second most important staple in the Mexican diet — have been planted, their price has gone up, too. In addition, the price of meat, poultry and dairy products, which are fed on corn imported from the United States, is increasing.

The stickiest issue is perhaps the impact on Mexico’s two million small-scale corn producers who are the backbone of what is left of its rural economy — already in such decline that many keep afloat only with money sent home by relatives working in the US. Theoretically, the corn price rise should have been a welcome boost to farmers in these areas. In practice, it has not happened that way. "We didn’t get paid any more for our corn this year," explains farmer Orlando Ramírez.

Dearth of infrastructure, lack of machinery, inadequate information, and weak motivation are just some of the reasons behind the uncompetitive Mexican small farmer. Ramírez says he expects to harvest two tonnes of corn from the hectare he planted this year — less than a sixth of the yields expected by the agribusinesses in Sinaloa. The corn ethanol bandwagon is passing by farmers like him.

Worries over corn shortages in the US are not unfounded. The scale of the American ethanol rush is staggering. There are 121 ethanol biorefineries in the US, according to the Renewable Fuels Association (RFA), producing nearly 6.3 billion gallons a year. A further 76 refineries are under construction, which together with expansions in existing facilities should double that capacity. And that is still only just over a third of Bush’s 2017 target.

Víctor Suárez, spokesman for Mexico-based ANEC, an activist group of corn farmers, imagines two opposed nightmare scenarios. In the first, he says, American corn farmers will not be able to keep up with the corn demand and the big Sinaloa producers will step in to the fill the void, leaving Mexicans without tortillas. In the second, the ethanol craze burns itself out, prompting US corn producers to dump their harvests on the Mexican market, devastating the small producers.

"In a country like Mexico, the government’s assumption that the market will sort everything out is irresponsible and absurd," Suárez says. "It leads to a policy void and a very uncertain situation in which food security is in danger."

Suárez argues that the only answer is for the government to inject large amounts of cash and effort into modernising the rural economy with the smallholder at the centre of the plan. That and renegotiating the 1994 North American Free Trade Agreement (Nafta) to keep tariffs protecting local produce intact. The tariffs affecting corn, beans and sugar are due to be lifted in January 2008.

A campaign called Sin Maíz No Hay País (No Corn, No Country), trying to bring together all the fears and complaints, was launched in August 2007. Meanwhile, Mexico’s politicians look as though they are feeling the pressure to jump on the biofuel bandwagon and join the US and Brazil, the world’s leader in producing sugar cane-based ethanol. Nagged by the knowledge that the country’s oil reserves are dwindling, Mexico’s parliament passed a law several months ago to encourage a home biofuel industry to start. But the bill is expected to be amended with a ban on using corn as a fuel source.

This should please Doña Catalina, furiously flipping her tortillas every day just a few miles from where the earliest evidence of domestication of corn in the world was found. "Poor corn," she says. "It isn’t meant to go in cars. It is meant to feed our children and our grandchildren. And their grandchildren, too."