Mexico Restricts Price of Foodstuffs.

In an attempt to limit inflation and provide for its poorest citizens, the Mexican government has capped the prices of basic foodstuffs, such as beans and vegetable oil.

From a humanitarian point of view, this is a smart idea. Obtaining reasonably priced food has been getting increasingly difficult for the average, and especially the poorest, Mexicans.

Some blame the higher prices on the United States diverting much of its corn (maize) crop to biofuels, particularly ethanol, in an attempt to wean off the American car market from foreign oil. And this could be a factor, but only a single factor out of many.

The argument is that due to NAFTA (the North American Free Trade Agreement), Mexico was flooded with cheap, subsidized American crops grown using new technologies which increased crop yields while reducing the expenses involved in farming. Poor Mexican farmers, without new technologies or seeds, and with weaker subsidies than their American counterparts, could not compete with the Americans, and their businesses--their farms--became bankrupt. This argument is also used to explain the increase in illegal immigration to the United States: many of those bankrupt farmers and their employees (if any) then immigrated north looking for money after they lost their livelihoods at home. However, so long as the United States kept exporting corn and other foods to Mexico in such large quantities, the price of food for Mexicans actually became more and more affordable for Mexicans--at least those still employed.

But now the United States is no longer trading as much of its food surplus with Mexico as land is being converted into growing more corn, and much of that corn is being turned into ethanol. There is less land to grow soybeans, wheat, and other grain or vegetable crops. Because of the so-called 'knock-on' effect, prices of other foods, such as chicken, beef, milk, etc. which depend on grain-fed animals, have shot up even for Americans. For Mexicans, the price hike is even more threatening. The local agriculture industry is decrepit because of Mexico's own fault, and the number of farmers has decreased because of NAFTA.

Another factor would be Mexico's economic growth. Inflation normally is paired with GDP growth. For most developed countries, this would not be so bad, as the enlargement of the economy often entails an increase in the bulk of worker's salaries. In Mexico, this is not the case.

As with other developing countries, such as the Philippines, Mexico is run by a relatively small elite, and the majority of people are rather poor. The system, with both government and industry run by the elite, is such that the country is run for the benefit of the de facto aristocracy at the expense of the ordinary people--and the reputation of the country.

Which gets down to the crux of the issue. Rather than fleeing to the United States, or limited reform such as this restriction of food prices, Mexico needs major structural reform. The elite need to be ousted from their preeminent position in politics, and pared down in industry. Some state-run companies ought to be privatized, via stockholding. In short, reform needs to be made to get the bulk of poor Mexicans into contributing more to, having a stake in, and benefiting from, Mexico's economic success.

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Found this article interesting? Check out:
History: The Roadmap to the Future.
History: The Roadmap to the Future--Africa.
History: The Roadmap to the Future--Asia.
History: The Roadmap to the Future--Europe.
History: The Roadmap to the Future--Latin America.

Or:
The Science Fiction Channel + Technorium.
The Vegetarian Diaries + Biologeel.