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Corn for poultry in between free trade and protectionism

White corn
Thanks to politics putting the corn trade in the center of the debate, the efficiency of national poultry production in Mexico is being called into question. Photo by Benjamín Ruiz.
February 28, 2017

The once good times of free trade seem to have vanished in an instant. After years of negotiations, tariff reductions and a tug of war, trade between the U.S. and Mexico flowed freely. Now, everything indicates that we will return to the dark ages.

The case of corn is interesting. The staple food – a basic in the Mexican diet – I would say, is now at the center of debate. However, we must not forget there are two types of corn: white corn, which basically is for human consumption, and yellow corn, for feed and industrial uses.

Over the years, Mexico has become the first destination for U.S. yellow corn exports. A country that traditionally used a lot of sorghum for feed manufacturing, changed to corn purely based on market issues. Who said the agricultural industry is not sexy?

Facing threats from U.S. President Donald Trump’s government to re-negotiate, and perhaps break the North American Free Trade Agreement, Mexico, in panic, was stunned. But some are already speaking out.

Last week, Armando Rios Piter, a senator from the Party of the Democratic Revolution of Mexico, introduced a bill to stop buying corn from the northern neighbor. According to U.S. Grains Council data, in 2016 Mexico imported 13.3 million metric tons of yellow corn and 1.13 million metric tons of white corn. Ríos Piter proposes to stop importing 60 percent the first year, that is, about 8.7 million tons, and bring it from Canada, Argentina and Brazil. Good choices abound.

While facing Trump's attacks such a response is an obvious choice for the country but, it seems to me, that the rationale is not correct. In essence, the senator’s argument is based on food self-sufficiency, that is to say white corn for human consumption. Let’s remember that Mexico imports mostly yellow corn for feeds that are intended for what end? Almost 50 percent of the import is feed for chicken and egg production, the cheapest animal proteins for the population.

Thus, the circumstances on both sides of the “wall” are taking us back 30 years — to controls, government restrictions on trade... to protectionism, to which I ask: who’s being protected? What do you think?

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