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REGION COULD SUFFER SEVERELY FROM U.S. ETHANOL POLICY.

Article Excerpt
The tortilla paradox is coming to Central America. First seen in Mexico (see SourceMex, 2007-01-10 and 2007-01-31), the phrase has come into use to denote a price reversal by which tortillas now cost more in the lands where they are the staple food than they do in New York. The World Food Organization (FAO) says cereal grains, particularly corn and wheat, have reached their highest prices in a decade. The spike, says the FAO, is the result of the US choice to feed corn to its cars as well as to livestock and people, as much of the world's corn production is slated for ethanol.

In the past year, since January 2006, the price of a quintal (45.4 kg) of corn has risen 37.5% in Guatemala. The country produced 25 million quintals during the year, equaling consumption, leaving none for export, while ethanol production has quadrupled since 2000 and now claims 20% of the yellow-corn crop. China has contributed to world demand with the construction of at least four major ethanol-manufacturing centers during the period, boosting production at a rate of 10%-15% a year.

This, said Susana Gauster of the Coordinadora de Organizaciones No Gubernamentales y Cooperativas (CONGECOOP), "is a dangerous tendency in the medium and long term since it displaces food production and, under the dominant trade schemes, generates extensive monocultures whose environmental damage is well known."

The tortilla paradox could have some positive effects, Gauster said. The most pressing problem at the moment for local producers is one exacerbated by CAFTA. "They are the surpluses that used to be disposed of under conditions of 'dumping,' on the international markets, displacing the food production of many countries and thus generating food dependence." She said the current high prices might add up to a short-term positive effect for local producers.

Just months ago, the situation was diametrically different. In September 2006, the US "donated" 18,000 tons of yellow corn to Guatemala. Local producers cried dumping.

Now, on behalf of CONGECOOP, Gauster is calling for...

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