Mexican keep subsidies on tortillas

11 March 1998

Mexican keep subsidies on tortillas

TORTILLA industry experts want the complex chain of corn and tortilla
subsidies in Mexico abandoned.

The government spends more than $1 billion a year subsidising supermarket tortilla prices. Price controls on all other foods, such as milk and sugar, have been lifted but tortillas are a staple of the Mexican diet with some 56,000 tortillerias and corn mills across the country.

The government argues the reduction of price controls would accelerate
inflation and a jump in prices could spark protests. But most experts believe
the stance has been taken on the basis of vested interests.

Industry has called for a support system directed solely at around one-third of the 90 million population too poor to pay the full price.

• Financial Times 11/03/98 page 37